Asian shares gain as US recovery momentum instils optimism

Reuters: Asian shares rose on Wednesday as positive US data pointing to a moderate recovery in the economy offered comfort, while the euro eased on worries over the consequences of the Cyprus bank bailout deal which inflicts huge losses on wealthier depositors.

Investors shifting money to chase higher premiums on risk assets such as stocks kept a lid on safe-haven bullion, keeping spot gold capped below $ 1,600 an ounce, barely holding above its 14-day moving average.

The defensive euro underpinned the dollar against a basket of major currencies, which was not far from a 7-1/2-month peak of 83.166 set earlier this month. The US currency rose 0.3% against the yen to 94.74 on expectations of stronger monetary stimulus under new central bank leadership ahead of the Bank of Japan’s policy meeting next week.

Data on Tuesday showed demand for US-made durable goods surged in February, suggesting factory activity continued to expand. US single-family home prices started the year with the biggest annual increase since June 2006, according to a separate report.

The Conference Board industry group, however, said consumer confidence tumbled in March as Americans turned more pessimistic about short-term economic prospects, but stock markets focused on the good news, taking the Dow Jones industrial average to a record closing high and the Standard & Poor’s 500 Index to just below a record closing peak.

The MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.5% to a one-week high. Japan’s Nikkei stock average was nearly flat in choppy trading after many shares went ex-dividend, offsetting the boost to sentiment from Wall Street’s data-led gains.

The euro eased 0.1% to $ 1.2853, hovering near a four-month low of $ 1.2828 touched on Tuesday, and capped by its 200-day moving average of around $ 1.2880. The euro closed below the key technical level on Monday for the first time since November.

US crude futures eased 0.2% to $ 96.17 a barrel and Brent was nearly unchanged at $ 109.33.