Asian shares edge to two-week high on China optimism

Wednesday, 20 November 2013 10:19 - - {{hitsCtrl.values.hits}}

REUTERS: Asian shares edged to a two-week high on Tuesday, adding to the previous day’s hefty gains on China’s economic reform plans, while

the dollar was hobbled by expectations the US Federal Reserve will keep its stimulus a little longer. MSCI’s broadest index of Asia-Pacific shares outside Japan added 0.2%, building on Monday’s 1.4% rally fed by a sharp jump in Chinese stocks and heading for a fourth straight day of gains. “China’s reform pledge was sexier than perceived, bringing risk back into play in emerging markets including South Korea which is still comparably low valued,” said Kim Yong-goo, a market analyst at Samsung Securities. China’s CSI300 Index surged 3.3% on Monday, its biggest one-day rise in two months, to hit a four-week peak. The index took a breather on Tuesday, slipping 0.4%. In Tokyo, the Nikkei fell 0.8%, further moving away from a six-month high hit on Friday, with a trader saying domestic investors continued to cash in recent gains. The yen was up 0.4% at 99.64 yen to the dollar, adding to a 0.2% rise overnight to end a two-day run of losses. The euro rose 0.1% to $ 1.3515, not far from a two-week high of $ 1.3542 reached on Monday. Against a basket of major currencies, the dollar eased 0.2% to 80.661, languishing near a more than one-week low of 80.565 reached on Monday. As the dollar weakened on expectations that the Fed will continue its bond-buying campaign under incoming chief Janet Yellen, the 10-year US Treasuries yield slipped to below 2.70%. Investors remained on guard for any clues as to when the U.S. central bank will start unwinding its $ 85 billion-a-month stimulus program, although many in the markets now see any move unlikely until March. Overnight, US stocks were mixed. The Standard & Poor’s 500 ended lower while the Dow Jones industrial average eked out a slight gain but failed to close above its milestone level of 16,000, as stocks sold off late in the session after cautious comments by activist investor Carl Ichan on the equities market. US S&P 500 E-mini futures were little changed in Asian trade. Among commodities, US crude prices held steady at about $ 93 a barrel, having fallen 0.9% overnight to near a 5-1/2 month low of $ 92.51 touched last Thursday. Gold stabilised at around $ 1,273 an ounce after sliding 1.2% in the previous session.