* MSCI Asia ex-Japan, Nikkei up 0.3 pct
* Euro steadies, pops back above $1.29
* U.S. index futures edge up 0.1 pct after Friday gains
* Oil, copper firm, easy policy supports gold
By Alex Richardson
SINGAPORE, Dec 10 (Reuters) – Asian shares clambered to a
16-month high on Monday as investors took heart from economic
data from China and the United States that raised hopes about
the outlook for growth in the world’s top two economies.
The euro was under pressure, having been knocked by the
prospect of a recession in Germany and political uncertainty in
Italy after Prime Minister Mario Monti, an investors’ favourite,
said at the weekend he intended to resign early.
MSCI’s broadest index of Asia Pacific shares outside Japan
and Tokyo’s Nikkei share average both
gained 0.3 percent.
The MSCI index rose more than 1 percent last week, its third
successive weekly gain, taking it to levels not seen since early
August 2011, and there was a further boost for regional markets
on Sunday when China reported a pick-up in factory output and
retail sales growth to eight-month highs.
“We had some really good economic data coming out from
China,” said Juliana Roadley, market analyst at Commonwealth
Securities. “Over the last few years, you had the Chinese
government pulling back on growth and trying to control things
so that it didn’t over-boil. Now it looks like all that good
work has been done.”
Hopes that China’s economy is revving up again after seven
straight quarters of slowing growth also boosted riskier assets
such as oil and copper.
Asian “risk” markets took in their stride China trade data
on Monday that showed both imports and exports below forecasts.
“The export slowdown shows external demand faces uncertainty
due to concerns over the fiscal cliff in the US,” Zhang Zhiwei,
chief China economist at Nomura in Hong Kong, said. “Nonetheless
it does not change our view that growth is on track for a strong
recovery in Q4, as (growth) is mostly domestically driven.”
On Wall Street, the Dow and S&P; 500 had risen
modestly on Friday after an unexpected fall in the U.S.
unemployment rate. S&P; 500 futures were up 0.1 percent on
Monday.
MARKETS WATCH ITALY
The euro slid in early trading towards a two-week low
of $1.2876 plumbed on Friday, before popping back above $1.29.
Investors had sold the euro after Germany’s central bank on
Friday warned that the euro zone’s biggest economy could soon
enter recession.
Italian Prime Minister Monti’s surprise announcement at the
weekend came a few days after former Prime Minister Silvio
Berlusconi abruptly withdrew support for Monti’s technocrat
government, formed over a year ago in an effort to restore
Italy’s credibility with investors.
“If Monti’s pro-euro stance is to back off, that should
raise concerns about the euro,” said Junya Tanase, chief
currency strategist at JPMorgan Chase in Tokyo.
Italian bond yields will be closely watched on Monday. The
10-year yield, the main barometer of investor confidence, stood
at 4.5 percent at the end of last week, 323 basis points higher
than the yield on the lower risk German equivalent but well
below the 7.3 percent peak hit last year, when the spread over
German Bunds hit 550 points.
The U.S. dollar rose about 0.3 percent against a basket of
major currencies.
Commodity markets were also generally firmer, with copper
, which draws strength from expectations of Chinese
industrial demand, rising 0.2 percent to around $8,050 a tonne
and oil rising around 0.3 percent.
Brent crude trade around $107.40 a barrel and U.S. crude
fetched about $86.20.
“Investors are slightly more optimistic about China’s
economic recovery than before and that is supportive for oil,”
said Ken Hasegawa, a commodity sales manager at Newedge Japan.
The easy outlook for monetary policy continued to support
gold, with the U.S. Federal Reserve expected to signal this week
it will continue to pump money into the economy in 2013. Also,
there was talk of a possible rate cut next year by the European
Central Bank.
Spot gold firmed 0.1 percent to around $1,705 an
ounce.
