Asian stocks rise on technology
Asian shares rose for a third straight session on Tuesday, led by tech stocks, while the Australian dollar slid ahead of what is expected to be a close decision by the central bank on whether to raise interest rates again.
Lower volatility in financial markets and upbeat comments from SanDisk (SNDK.O), the biggest maker of NAND flash memory cards, lifting tech-heavy share markets such as South Korea and Taiwan.
The euro remained under pressure, with dealers unconvinced that Greece’s fiscal crisis was close to being resolved until they saw an aid package.
Fears about the ability of a handful of European countries to finance their growing debts have kept a lid on risky assets, even though the global economic recovery generally appears on track.
“Euro/dollar looks vulnerable to any Greek relapse and upside will be heavy going and likely capped around resistance at $1.3693,” said Mitul Kotecha, global head of foreign exchange strategy with Credit Agricole CIB, said in a note.
“In any case, the saga is set to roll on for the next few weeks.”
Japan’s Nikkei share average .N225 was nearly flat on the day. Strength in the tech sector was countered by weakness in Astellas Pharma Inc (4503.T), which dropped 1.5 percent after launching a $3.5 billion hostile offer for U.S. firm OSI Pharmaceuticals (OSIP.O).
“This will require a lot of money on Astellas’s part and could make it tough for the shares over the short term, though over the long term the move has good potential,” said Masayoshi Okamoto, head of dealing at Jujiya Securities in Tokyo.
The MSCI index of Asia Pacific shares outside Japan .MIAPJ0000PUS was up 0.6 percent, with the information technology sector in clear command of the day, up 1.5 percent.
After plunging 14 percent in the month to Feb 8 on worries about the strength of the global recovery and Greece, the index has retraced nearly half its losses, with international fund managers slowly rebuilding their exposure to the region.
Clearly risks remain, however.
Hong Kong’s Hang Seng index .HSI, a favorite among foreign investors, dropped 0.9 percent, led by a 6 percent drop in HSBC’s (0005.HK) stock after Europe’s biggest bank posted disappointing 2009 results.
CLOSE CALL IN AUSTRALIA?
In currency markets, the Australian dollar was down 0.2 percent on the day, at US$0.8991. The 100-day moving average, currently at $0.9067, capped the small rebound in the Australian dollar last month and stands as a near-term obstacle.
A majority of economists polled by Reuters expect the Reserve Bank of Australia to raise policy rates to 4 percent later on Tuesday after a cumulative three-quarters of a percentage point worth of rate increases between October and December of 2009.
A decision is expected at around 0330 GMT (10:30 p.m. EST).
However, after the RBA stunned markets by pausing last month, dealers are treating Tuesday’s decision cautiously.
The euro was down 0.1 percent at $1.3540, about a cent above 9-month lows plumbed in February. The dollar index .DXY rose 0.3 percent against a basket of major currencies.
Sterling dipped and was seen likely to stay weak after tumbling to a 10-month low the previous day, hurt by worries that a UK election due in months could give neither the opposition Conservatives nor the ruling Labour Party a parliamentary majority.
Copper fell, after surging to five-week highs in the previous session, as concerns over supply from top producer Chile eased after the mines there reopened following a massive weekend earthquake.
Shanghai copper futures slid nearly 2 percent and London prices dropped more than 1 percent, dragging the rest of the base metals complex, as investors focused on the slow recovery in global demand, highlighted by bulging stocks of the industrial metal.
Oil was steady below $79 as the dollar strengthened on European sovereign risk worries and as forecasts for rising U.S. crude and gasoline inventories capped prices.