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Shares Rise on Resources; Dollar Recovers PDF Print E-mail
Tuesday, 08 April 2008

REUTERS, SINGAPORE  - Asian shares rose on Monday, with resources companies benefiting from stronger metals and oil prices, while the dollar rose, shrugging off worse-than-expected U.S. job losses.

European stock markets were set to follow suit, with financial bookmakers in London calling Britain's FTSE 100, Germany's DAX and France's CAC-40 up by around 0.3 percent.

"Higher crude and raw materials prices push up resource-related shares, and they could further improve their valuations if investors start to believe those factors will benefit their earnings," said Kazuhiro Takahashi, general manager of the equity marketing department at Daiwa Securities SMBC in Japan.

"Still, the market will likely stay calm for the coming week or two as investors want to see U.S. corporate earnings results to get clues about the health of the economy and whether the financial turbulence will continue."

In Australia BHP Billiton <BHP.AX>, the world's top miner and Australia's top oil and gas producer, Woodside Petroleum Ltd <WPL.AX>, and Newcrest Mining <NCM.AX> all rose, while in Japan oil field producer Inpex Holdings <1605.T> gained.

Tokyo's Nikkei ended up 1.3 percent, while stocks elsewhere in Asia, as measured by MSCI's index were up 0.7 percent by 0608 GMT. Asia ex-Japan stocks are still down 10 percent this year.

Seoul's KOSPI index rose 0.4 percent, Taipei's TAIEX gained 1.6 percent, and Hong Kong's Hang Seng rose 1.1 percent. Sydney's S&P/ASX 200 index ended flat as losses in the bank sector balanced gains in resources.

BANKS WEAK

Concerns about the impact of the credit crisis on the financial system lingered, driving banking shares lower.

In Australia, ANZ Banking Group <ANZ.AX> fell more than 6 percent after it said it expected total bad debt provision in the first-half of fiscal 2008 to be about A$975 million ($894 million).

"We've been saying that the banks are going to find it tough because of the U.S. issue and inter-connected problems with subprime," said Lucinda Chan, division director at Macquarie Equities. "Now that they have to physically announce it, it makes it really bad."

In South Korea Kookmin Bank <060000.KS> and Woori Finance Holdings <053000.KS> both fell around 2 percent after a local newspaper report pointed to South Korean losses related to the global credit crisis.

U.S. JOBS FALL

Surprisingly weak U.S. jobs data added to evidence that the credit crisis may have tipped the U.S. economy into recession. U.S. Treasuries rose on the news on Friday but gave up some of their gains on Monday.

The dollar initially fell but recouped losses, supported by dollar buying by Japanese importers and talk that Japanese investors were selling the yen against higher-yielding currencies.

The weak reading was not a total shock and further declines in the dollar may be limited in the near term, said a senior trader for a Japanese trading house.

"It is not surprising that the numbers were bad," the trader said, adding that given some surprising weakness in recent U.S. employment data, investors had been prepared for another soft reading.

The dollar had risen 1 yen from the day's lows at 102.38 yen. The euro rose 160.65 yen and was trading at $1.5660 against the dollar.

The worse-than-expected jobs data bolstered market expectations for more aggressive rate cuts by the Federal Reserve.

Oil prices extended Friday's 2 percent rise, adding 33 cents to $106.56. Copper futures touchedthree-week highs in Shanghai, with the June copper contract, the most active on the Shanghai Futures Exchange, up 1.4 percent.

Gold extended gains, changing hands at $914.70/915.50 an ounce. Silver and platinum also rose.

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