Asia shares rise on improving risk appetite
Wednesday, 11 November 2009
HONG KONG, Nov 10 (Reuters): Asian stocks nudged higher Tuesday on hopes continued stimulus will support economic recovery, while the dollar hovered near a 15-month low on expectations US rates will remain near zero.
European equity futures were up 0.3 per cent while US equity futures were down 0.3 per cent.
Profit-taking weighed on the euro after it gained more than 1 per cent Monday while the dollar steadied against a basket of major currencies after hitting its lowest level since August last year Monday.
Asian share markets were buoyed by a 2 per cent jump in the Dow Jones Monday to a 13-month high and continued to ride on expectations for a prolonged period of low interest rates after Group of Twenty (G20) finance ministers pledged at the weekend to keep emergency measures in place until a recovery was assured.
"While dollar bulls are licking their wounds, equity and 'everything risky' investors are having a field day," said Matthew Strauss, a senior currency strategist at RBC Capital in Tokyo.
Japan's Nikkei index gained 0.6 per cent, after giving up some early gains as a late rise in the yen trimmed advances in exporters.
The MSCI index of Asia Pacific stocks traded outside Japan was 0.7 per cent higher while the Thomson Reuters index of regional shares was flat.
High-yield currencies such as the Australian and New Zealand dollars gained against the dollar on carry trade demand as US rates are expected to stay close to zero for some time, traders said.
Rising risk appetite also favored Asian currencies, forcing central banks across the region to intervene to curb currency appreciation as funds flowed into riskier assets.
European equity futures were up 0.3 per cent while US equity futures were down 0.3 per cent.
Profit-taking weighed on the euro after it gained more than 1 per cent Monday while the dollar steadied against a basket of major currencies after hitting its lowest level since August last year Monday.
Asian share markets were buoyed by a 2 per cent jump in the Dow Jones Monday to a 13-month high and continued to ride on expectations for a prolonged period of low interest rates after Group of Twenty (G20) finance ministers pledged at the weekend to keep emergency measures in place until a recovery was assured.
"While dollar bulls are licking their wounds, equity and 'everything risky' investors are having a field day," said Matthew Strauss, a senior currency strategist at RBC Capital in Tokyo.
Japan's Nikkei index gained 0.6 per cent, after giving up some early gains as a late rise in the yen trimmed advances in exporters.
The MSCI index of Asia Pacific stocks traded outside Japan was 0.7 per cent higher while the Thomson Reuters index of regional shares was flat.
High-yield currencies such as the Australian and New Zealand dollars gained against the dollar on carry trade demand as US rates are expected to stay close to zero for some time, traders said.
Rising risk appetite also favored Asian currencies, forcing central banks across the region to intervene to curb currency appreciation as funds flowed into riskier assets.