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GLOBAL MARKETS-Asia shares fall, euro consolidates vs dlr

Published 04/13/2010, 02:46 AM
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* Asia ex-Japan shares fall 0.89 pct ahead of U.S. earnings

* Euro awaits Greece's 1.2 bln euros t-bill sale

* Euro flat vs dlr, falls 0.4 pct against yen

By Raju Gopalakrishnan

SINGAPORE, April 13 (Reuters) - Asian shares fell on Tuesday ahead of key earnings in the United States while the euro consolidated against the dollar but fell against the yen ahead of a treasury bill sale by Greece later in the day.

European stock markets were also expected to open lower, with spreadbetters seeing Britain's FTSE 100 <.FTSE> down 12 to 13 points, or as much as 0.2 percent, Germany's DAX <.GDAXI> down 5 to 7 points, or as much as 0.1 percent, and France's CAC-40 <.FCHI> down 11 to 12 points, or as much as 0.3 percent.

Several Asian stock markets and regional currencies fell back after strong rises over the past several weeks.

In Tokyo, the Nikkei <.N225> fell 0.81 percent, moving further away from 18-month highs hit last week, as the yen strengthened and investors took profits in chipmakers ahead of earnings from tech bellwether Intel Corp later in the day. [.T]

"Though good earnings are expected, these predictions are factored in, so that anything except a large positive surprise could lead to selling once the results are out," said Takashi Ushio, head of the investment strategy division at Marusan Securities.

Other major U.S. companies to report results this week include JPMorgan , Google , Bank of America and General Electric .

But sharp falls are not expected, with support likely to hold for now near the Nikkei's 25-day moving average, currently at just under 11,000. The index closed at 11,161.23 points.

"Demand overall isn't bad, and the market currently lacks strong reasons to either buy or sell," said Kenichi Hirano, operating officer at Tachibana Securities.

The MSCI index of Asian shares outside Japan <.MIAPJ0000PUS> was down 0.89 percent.

Traders said the low-yielding yen, which tends to get bought back when investors turn cautious, was helped by the slide in share markets and advanced on the dollar and the euro.

The dollar slipped about 0.4 percent against the yen, hovering around 92.8 yen .

SHORT-LIVED

The euro's rally against the dollar appeared to be short-lived as it hovered around $1.3588, broadly steady from late in New York on Monday, and well below a high of $1.3691 struck in the previous session.

The single currency had jumped after euro zone finance ministers approved a 30 billion euro ($40.5 billion) rescue package of loans, which Greece could tap if needed. At least 10 billion euros are also expected from the International Monetary Fund. [nSGE63C004]

The euro shed about 0.4 percent on the yen, as doubts returned about how and whether Athens uses the bailout fund and how it copes with its debt mound longer term. [ID:nLDE63B0NP]

Many traders said in the longer term the bailout package was not a game-changer and the currency would head lower in the next few months. But a trader at a European bank said the single currency could test $1.37 later in the day if a proposed 1.2 billion euros sale of Greek Treasury paper draws a good response. [nTOE63B0AM]

"The auction results would be a litmus test as it's the first sale after the announcement of the aid package for Greece," said Mitsuru Sahara, chief manager for the currency derivatives trading department at Bank of Tokyo-Mitsubishi UFJ.

A sharp drop in yields following Sunday's deal on the rescue package for Greece should snuff out doubts over Athens' ability to place the treasury bills, traders in Europe said. [nLDE63B17P]

YUAN FLEXIBILITY UNLIKELY SOON

U.S. President Barack Obama met Chinese President Hu Jintao in Washington on Monday and called for more flexibility in the yuan. The Xinhua news agency later quoted Hu as telling Obama that Beijing would "firmly stick" to its own path on the yuan. [nTOE63C039]

The Malaysian ringgit , often used as a proxy for the yuan, fell 0.7 percent on the news.

"It seems that the market had built up dollar-short positions in the past two weeks in anticipation of China moves. What we are seeing is just some short covering," said a Kuala Lumpur-based dealer. [nSGE63C059]

On metals markets, London's three-month copper futures fell more than half a percent, extending losses after the market failed to hold on to a rally to a 20-month peak in the previous session on worries that growth in prices have outpaced demand. [nSGE63C00F]

U.S. crude futures fell for the fifth straight day, edging toward $84, ahead of data due later in the day that is expected to show a build in U.S. crude stockpiles. [nSGE63C071]

Spot gold edged down after a round of physical selling pulled down the precious metal from a four-month high the previous day. [nTOE63C03C] (Editing by Jeremy Laurence)

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