Asian stocks near 22-month highs, euro soft
Thursday, 8 April 2010
SYDNEY, Apr 7 (Reuters): Asian stocks neared 22-month highs Wednesday as regional investors largely shrugged off festering worries about fiscal problems in Europe and focused on a recovery in the world economy.
The upbeat mood about global growth was also reflected in commodity markets, with copper prices hovering near 20-month highs and oil prices near 18-month peaks.
Financial spreadbetters expected Britain's FTSE 100 to open down 2 to 4 points, Germany's DAX to open up 11 points, and France's CAC 40 to open down 2 to 3 points.
While worries about Greece's ability to cut its mountain of debt continued to weigh on the euro, those concerns scarcely caused a ripple in Asian markets. Instead, some investors cited profit-taking as the biggest near-term threat to the regional rally in stocks, bonds and currencies.
A recent run of strong US data from jobs to manufacturing and service activity have fanned hopes the world's biggest economy was slowly stirring again.
Mounting expectations that China may revalue the yuan some time this year also bolstered the appeal of regional currencies and assets.
Underscoring Asia's bright growth prospects, the World Bank sharply raised its forecasts for economic growth in East Asia to 8.7 per cent Wednesday, up from its previous 7.8 per cent estimate, led by China.
"Current economic data does seem to suggest the (Chinese) economy is churning along nicely," said Belle Liang, head of research at Core Pacific-Yamaichi.
"The market is also speculating that the yuan will appreciate this year, leading to some currency inflows today."
China hinted at its readiness to let the yuan rise Wednesday by alerting exporters to potential risks. The market expects the yuan to rise by 3 per cent against the US dollar in the next year.
That has lifted other Asian currencies seen as proxies for the yuan, especially the Malaysian ringgit, which has risen 7 per cent this year.
The MSCI's broad measure of shares in the Asia-Pacific outside Japan rose 0.7 per cent Wednesday, nearing levels last seen in June 2008.
The upbeat mood about global growth was also reflected in commodity markets, with copper prices hovering near 20-month highs and oil prices near 18-month peaks.
Financial spreadbetters expected Britain's FTSE 100 to open down 2 to 4 points, Germany's DAX to open up 11 points, and France's CAC 40 to open down 2 to 3 points.
While worries about Greece's ability to cut its mountain of debt continued to weigh on the euro, those concerns scarcely caused a ripple in Asian markets. Instead, some investors cited profit-taking as the biggest near-term threat to the regional rally in stocks, bonds and currencies.
A recent run of strong US data from jobs to manufacturing and service activity have fanned hopes the world's biggest economy was slowly stirring again.
Mounting expectations that China may revalue the yuan some time this year also bolstered the appeal of regional currencies and assets.
Underscoring Asia's bright growth prospects, the World Bank sharply raised its forecasts for economic growth in East Asia to 8.7 per cent Wednesday, up from its previous 7.8 per cent estimate, led by China.
"Current economic data does seem to suggest the (Chinese) economy is churning along nicely," said Belle Liang, head of research at Core Pacific-Yamaichi.
"The market is also speculating that the yuan will appreciate this year, leading to some currency inflows today."
China hinted at its readiness to let the yuan rise Wednesday by alerting exporters to potential risks. The market expects the yuan to rise by 3 per cent against the US dollar in the next year.
That has lifted other Asian currencies seen as proxies for the yuan, especially the Malaysian ringgit, which has risen 7 per cent this year.
The MSCI's broad measure of shares in the Asia-Pacific outside Japan rose 0.7 per cent Wednesday, nearing levels last seen in June 2008.