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GLOBAL MARKETS-Asia shares rise on earnings news, dlr slides

Published 10/23/2009, 02:40 AM
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* Asia shares rise, buoyed by upbeat earnings

* Dollar resumes slide to 14-mth lows on U.S. rate outlook

* British pound hits one-month high ahead of UK GDP data

* European stock futures up 1 pct

By Susan Fenton

HONG KONG, Oct 23 (Reuters) - Asian shares rose on Friday as investors were encouraged by upbeat earnings reports from the United States and Asia while the dollar resumed a broad slide after a Fed official indicated U.S. rates would remain low.

European stock futures gained 1 percent while U.S. equity futures edged up 0.2 percent.

The British pound hit its highest level in a month against the dollar at $1.6679 at one point ahead of UK third-quarter GDP data later in the day which is expected to show a return to growth.

"After (Bank of England Governor Mervyn) King's recent bullish comments, if GDP is good, that will help sterling," said Kazuyuki Kato, treasury department manager at Mizuho Trust & Banking in Tokyo.

"But the pace of sterling's gains will likely moderate as speculator short-covering nears its end."

Minutes from the Bank of England and comments from its governor have encouraged views that it may not extend its 175 billion pound ($290.8 billion) quantitative easing next month, although another BOE policy maker threw that back into doubt on Thursday.

Shanghai's benchmark share index was up 2 percent as a government researcher said China's mighty export sector was likely to resume year-on-year growth this quarter.

Bullish earnings in the United States from 3M Co, AT&T Inc and McDonald's Corp on Thursday and further strong earnings reports in Asia on Friday buoyed equity investors.

DOLLAR VULNERABLE

Shares in South Korea rose 0.6 percent, helped by a 6.7 percent surge in Kia Motors Corp after the country's No. 2 car maker said it swung to a record quarterly profit, helped by a weaker won.

Hynix Semiconductor Inc, the world's No. 2 memory chip maker, announced a quarterly profit after seven quarterly losses. Its stock however has already nearly trebled this year and dipped 0.3 percent.

The MSCI index of Asia Pacific stocks traded outside Japan was up 1.3 percent while the Thomson Reuters index of regional shares was 1.5 percent higher.

Shares in Japan finished up just 0.2 percent but exporters like electronics giant Sony Corp gained on a weaker yen.

The dollar hit a 15-month low against the Swiss franc below 1.0035 francs. It headed back toward 14-month lows against a basket of currencies after Chicago Federal Reserve President Charles Evans reinforced the view that U.S. rates will stay low, saying the Federal Reserve's focus remained on an accommodative rate policy.

"The dollar looks vulnerable to a short, brutal move to the spring 2008 lows," said David Watt, senior currency strategist at RBC Capital in Australia.

The euro rose above $1.5047 for the first time in 14 months.

Gold hovered above $1,060 an ounce, benefiting from the dollar's slide. The oil price edged above $81 a barrel after solid U.S. earnings reports raised the prospect of higher oil demand as the global economy continues to recover.

Shares in Hong Kong were up 1.5 percent by midday, helped by a 1.4 percent rise in global bank HSBC, which said on Thursday it would almost double its stake in Vietnam insurance and financial firm Bao Viet, continuing its expansion in emerging markets. (Additional reporting by Anirban Nag in SYDNEY and Kaori Kaneko in TOKYO; editing by Kazunori Takada) (susan.fenton@thomsonreuters.com; +852 2843 6367; Reuters Messaging: susan.fenton.thomsonreuters.com@reuters.net)

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