* No clear direction, with China stocks choppy
* Chinese banks on tap to report results
* Metals edge up, oil climbs above $70 on inventories
(Repeats to more subscribers)
By Kevin Plumberg
HONG KONG, Aug 19 (Reuters) - Asian stocks edged up on
Wednesday but hovered near three-week lows hit the previous
day, with investors cautious ahead of Chinese bank results and
wary that profit taking will continue to stall a six-month
rally.
Equities, metal prices and cyclical currencies like the
Australian dollar saw modest bounces, but investors were prone
to slashing their bets on riskier assets after shares in
Shanghai fell 16 percent in the last two weeksm, rattling
global markets.
China has become the focal point of investors, with
volatility in domestic markets rising on fears that the days of
easy money are coming to end. But how much this is tied to
doubts about China's recovery and what extent that affects the
rest of the world beyond sentiment is uncertain.
"There is still a great deal of confusion of the link
between China's recovery and its domestically focused growth
model and the notion that China can save the world," said
Patrick Bennett, Asia foreign exchange and rates strategist
with Societe Generale in Hong Kong, in a note.
"If there remain expectations or pricing or positions on
the latter notion, then this developing risk
consolidation/reversal must have further to run."
Crude oil rose by a $1 to $70.18 a barrel on a sharp
drawdown in U.S. inventories last week, but remained near the
top of its summer trading range.
U.S. stock markets rose around 1 percent overnight,
rebounding from sharp losses on Monday, as better-than-expected
results from big retailers encouraged investors to get back
into the market. []
But analysts remain worried about weak consumer demand.
Many firms which have beat or met market expectations this
earnings season have done so by cutting costs, not by moving
more goods out the door.
The MSCI index of Asia Pacific stocks outside Japan ticked
up 0.4 percent in morning trade on Tuesday. However, support
from the materials sector, which has led the rally in regional
markets, was fading.
The Shanghai composite <> slipped 0.3 percent after
hitting a two-month low on Tuesday, weighed by metals and
minerals producers.
Short-term trading signals have moved swiftly from
reflecting overbought conditions 12 trading days ago to now
being slightly oversold.
Bank of Communications <3328.HK><601328.SS>, the country's
fifth-largest lender, will kick off Chinese bank first-half
results on Wednesday, followed by two of the world's biggest
banks by market value later in the week: Industrial and
Commercial Bank of China <1398.HK><601398.SS> and China
Construction Bank <0939.HK><601939.SS>.
Pressure on net interest margins is expected to hurt the
banks' results despite barely receiving a scratch from the
global credit crisis.
Investors will also be keen on any clues for second-half
loan growth amid concerns Beijing has been trying to curb
red-hot lending to avoid overstimulating the economy as it
recovers. []
Japan's Nikkei share average <> dipped 0.2 percent,
hurt by weakness in retailers and real estate stocks, but Sanyo
Electric <6764.T> surged as much as 17 percent after a source
said it would sell batteries for hybrid cars to Toyota. []
The Australian dollar still remained largely shackled to
the whims of Chinese stocks, given the strengthening trade ties
between the countries.
The Australian dollar rose 0.2 percent in choppy trade to
US$0.8276 <AUD=>, though was near an 11-month high around
$0.8477 reached on Friday.
The U.S. dollar was largely unchanged against the euro and
yen after a small dip overnight as Wall Street recovered. The
euro was at $1.4141 <EUR=> while the dollar traded hands at
94.63 yen <JPY=>.
Three-month copper traded <MCU3> on the London Metals
Exchange rose 1 percent to $6,140 a tonne, while Shanghai
copper was up by 0.3 percent to 48,290 yuan <SCFc3>.
