Monday, September 13, 2010

Asia shares rise on China, US data, Basel III

SINGAPORE: Asian shares rose on Monday, Sept 13 on encouraging economic data out of China and the United States, and as a deal on global bank rules gave lenders some respite before having to raise hundreds of bilions of dollars in fresh capital.

* Japan's benchmark Nikkei average was up 1 percent. The MSCI index of Asian shares outside Japan was up 1.2 percent.

* Chinese factories increased production in August and money growth easily topped expectations, showing that the economy remained buoyant despite government efforts to clamp down on bank lending and property speculation.

* Inflation sped to its fastest pace in 22 months, though the bulk of price rises stemmed from higher food costs, which analysts have said should be transitory after a spell of bad weather across China this summer.

* U.S. wholesale inventories surged the most in two years in July, adding to signs that economic growth in the third quarter of the year may prove a bit stronger than many forecasters had expected. The U.S. trade gap also narrowed sharply in July.

* For Asia, China's figures are more important than those out of the United States, especially as robust August import figures on Friday mean China is buying more from the rest of the region.

Despite speculation that mounting inflationary pressures could trigger an interest rate rise, analysts say China's rising prices alone will not prompt further tightening and some say Beijing is still eyeing some slight stimulus towards year end to offset the U.S. slowdown.

* Global bank regulators, aiming to prevent any repeat of the international credit crisis, agreed in Basel, Switzerland, on Sunday to force banks to more than triple the amount of top-quality capital they must hold in reserve.

But to ease the burden, regulators gave the banks transition periods to comply. These periods, extending in some cases to January 2019 or later, are longer than many bankers had expected.

* The dollar traded at 84.15 yen after hitting a 15-year low of 83.34 yen last week. The euro rose to $1.2785 and gained 0.6 percent to 107.62 yen * Gold, a traditional safe haven amid bad economic news, was flat. Spot gold was hovering around $1,245 at 0220 GMT.

* Oil reached a one-month high, partly on the Chinese data which signalled strong demand from emerging economies. U.S. crude for October climbed 1.11 percent to $77.30, the highest price since Aug. 12.

* The Dow Jones industrial average closed up 0.46 percent at 10,462.77 points on Friday, with the Standard Poor's 500 Index rising 0.49 percent to 1,109.55. The Nasdaq Composite Index rose 0.28 percent to 2,242.48. - Reuters

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