Tuesday, November 2, 2010

GLOBAL MARKETS-Shares inch lower, dollar steady before Fed

SINGAPORE: Asian shares fell but the dollar kept a tenuous grip on overnight gains in Asia on Tuesday, Nov 2 ahead of U.S. elections and a Federal Reserve meeting that is expected to ease monetary policy.

* The MSCI index of Asia Pacific stocks outside of Japan dropped 0.4 percent by 0141 GMT as material and financial stocks weakened.

* Japan's Nikkei share average fell to a seven-week low and the broader-based Topix index hit a 19-month low, under pressure from the yen's strength as it hovers close to a record high against the dollar.

* The Nikkei was off 0.1 percent and the Topix was down 0.2 percent. They are down 13 percent and 12 percent so far this year, respectively.

* The dollar was last at 80.63 yen and within sight of a record low of 79.75 yen set in 1995. Markets were keeping a wary eye on the currency pair, with the risk of Japanese intervention seen mounting if the dollar slips below 80 yen.

* Gold ticked higher above $1,350 an ounce but investors were reluctant to make big bets ahead of the Federal Reserve's policy meeting, which could determine the fate of the dollar.

* The Fed is expected to announce a programme of large-scale asset purchases on Wednesday following a two-day policy meeting. * U.S. crude futures extended gains, drawing support from comments by OPEC linchpin Saudi Arabia that consumers would tolerate oil prices as high as $90 a barrel.

NYMEX December crude futures rose 19 cents to $83.11 a barrel, after settling up $1.52 at $82.95 a day earlier.

* Wall Street indexes on Monday were largely flat for the second session in a row as investors were cautious about taking fresh positions ahead of the outcome of U.S. mid-term elections and the Fed's policy meeting.

The elections are being closely watched because they are expected to the balance of power in the U.S. House of Representatives swing in favour of the Republicans. - Reuters


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