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GLOBAL MARKETS-Asian shares make mild gains, euro edges up

Published 02/16/2010, 01:58 AM
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* Asia shares mildly positive though some still on holiday

* Euro gains vs dollar but at decade low vs Aussie

* Financials, metals shares lead on MSCI Asia ex Japan

By Charlotte Cooper

TOKYO, Feb 16 (Reuters) - Asian share markets posted mild gains on Tuesday, with Australian stocks boosted by upbeat earnings from lender Westpac, while the euro held its ground as Greece was given 30 days to show its deficit plans were on track.

In Europe, financial spreadbetters expected Britain's FTSE 100, Germany's DAX and France's CAC to open 0.3-0.5 percent higher ahead of results from Barclays later, while S&P futures fell 0.1 percent.

Centres such as Hong Kong and Shanghai remained closed for the Lunar New Year and with U.S. markets also shut on Monday, gains in Asia were light as investors continued to weigh the fiscal risks in the euro zone and the impact of China's latest credit tightening.

Stocks in Australia gained 0.5 percent and the MSCI index of Asian shares excluding Japan rose 0.4 percent, touching its highest level in nearly two weeks, with financials and metals stocks leading the gains.

In Japan, the benchmark Nikkei edged up 0.2 percent and held just above the 10,000 mark for the third session in a row, although the mood was fragile due to China and Greece.

"Looking at the type of shares people are buying, it seems like the risks are tilted toward the downside rather than the upside," said Kiyoshi Noda, chief fund manager at MU Investments.

He said there were signs investors may be shifting funds into high-dividend shares in defensive sectors such as pharmaceuticals and telecommunications and away from some China-linked shares.

The broader Topix, which rose 0.2 percent, has lost less since investor confidence took a dive at the start of the year than benchmarks in Hong Kong, India and South Korea, off just 2.5 percent against nearly 5 percent for Seoul's KOSPI.

But Japan's third-largest trading company, Sumitomo Corp, lost more than 4 percent after it said it would launch a $1.4 billion tender offer to raise its stake in cable TV firm Jupiter Telecom, countering a rival bid by telco KDDI.

Seoul shares rose 0.5 percent, led by POSCO and Daewoo Engineering, which jumped 6 percent after a newspaper reported a U.S. consortium was seeking to buy the South Korean builder for $3 billion.

In Australia, shares in Westpac Banking Corp, the country's third-biggest lender, rose 6 percent after it posted a better-than-expected 33 percent rise in cash profit but warned investors of rising funding costs and consumer defaults.

The strong results lifted other banks, too, with top lender National Australia Bank and No.4 Australia and New Zealand Banking Group up about 3 percent.

EURO TESTS HIGHER GROUND

The euro gained 0.3 percent to $1.3640, lifting further off last week's nine-month low of $1.3532 as loss-cutting buy orders kicked in to take it higher.

But it was unable to make much progress after euro zone states urged Greece to announce more deficit-control steps by March, if needed, and shed no light on their pledge to defend the country in the event of market pressures.

The euro also slid to its lowest in a decade against the Australian dollar, dipping near A$1.5250, while the Australian dollar rose 0.6 percent against the greenback.

Earlier, minutes from Australia's central bank showed it intended to raise rates gradually this year but would keep an eye on sovereign risk abroad and China's efforts to cool its economy..

Copper prices rose, adding to the previous session's gains, and gold firmed, staying above $1,100 an ounce helped by investor caution over Greece's fiscal problems, although trading conditions were thin with various Asian markets closed.

U.S. Treasury debt prices were mixed as investors stayed on the sidelines ahead of a raft of U.S. data this week, with the March 10-year note future unchanged at 118-2.5/32.

Japanese government bond futures hit a seven-week high after a sale of five-year notes went smoothly and prompted investors to buy the mid-term sector and futures. (Editing by Kazunori Takada)

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