Asia stocks steady as rally fades, euro clings to gains

Friday, 29 August 2014 01:57 - - {{hitsCtrl.values.hits}}

Reuters: Asian shares held steady after pulling back from a 6-1/2 year high as the recent rally in risk assets petered out for now, while the euro clung to modest gains after rebounding from 13-month lows. The Australian dollar rose to a three-week high versus the US dollar after second quarter business investment data beat forecasts. In line with Asia’s subdued performance, spreadbetters expected a slightly lower start for European shares, forecasting Britain’s FTSE to open as much as 0.1% lower, Germany’s DAX down 0.15% and France’s CAX 0.1% lower. “European equities are set to edge lower as concern brews that traders have gotten ahead of the curve on ECB stimulus and that fighting in Ukraine flares up again,” Jonathan Sudaria, a dealer at Capital Spreads, said in a note to clients. MSCI’s broadest index of Asia-Pacific shares outside Japan stood little changed at 514.07 after rising to 515.13, its highest since early 2008. Tokyo’s Nikkei shed 0.6%, weighed by gains in the yen. The S&P 500 posted another record closing high overnight, although a lack of fresh bullish incentives kept gains small on Wall Street, only providing a short-lived lift for Asian shares earlier on Thursday. The euro received some reprieve after three sessions of losses as feverish speculation of an imminent round of easing by the European Central Bank was tempered for now. Sources told Reuters on Wednesday that the ECB is unlikely to take new policy action next week unless inflation figures on Friday show the euro zone sinking significantly towards deflation. The euro gained 0.2% to $1.3217, creeping up from a one-year low of $1.3152 plumbed on Wednesday. The dollar slipped 0.1% to 103.74 yen, having pulled back from a seven-month peak of 104.49 struck at the start of the week. The greenback has so far failed to build a steady foothold above 104 yen, partly due to persistently low US yields. In commodities, US crude oil dipped after choppy trading overnight following a report that showed declining US gasoline demand. US crude dipped 33 cents to $93.55 a barrel with the market looking to US economic data due later in the session to gauge the outlook for demand from the world’s largest oil consumer. Spot gold edged up as a lower dollar and lingering geopolitical tensions helped offset selling pressure from bullish US equities. Spot gold gained 0.3% to $1,286.36 an ounce.