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By Louise Heavens
SINGAPORE, March 24 (Reuters) - Asian shares rose in
holiday-thinned trade on Monday, led by a 4 percent gain for
Taiwan after an opposition win in the presidential election
boosted expectations for better trade ties and less political
tension with China.
Oil fell back towards the $100 mark a barrel as top
producer Saudi Arabia reassured consumers of its plans to boost
supply and gold fell back, giving respite to the battered U.S.
dollar and easing concerns about inflation.
"Unreasonably high commodities prices are returning to
normal and this, along with the perception that U.S. financial
markets have hit bottom, is boosting investor sentiment," said
Kim Hak-kyun, an analyst at Korea Investment & Securities.
Activity was subdued in Asia, however, as markets in many
parts of the region as well as in Europe remaining closed for
the Easter holiday, with investors waiting for U.S. trade to
resume later in the day.
U.S. stock index futures <SPc1> <DJc1> signalled that Wall
Street would likely extend last week's gains.
Shares in Seoul added 0.6 percent and Singapore's benchmark
climbed 2.5 percent. MSCI's index of shares outside Japan
<.MSCIAPJ> rose 1.3 percent, although it is still down 18
percent so far this year.
The MSCI ex-Japan index of financials <.MIAPJFN00PUS>
extended gains to notch up a 1.4 percent rise by 0617 GMT after
a report in the New York Times said JPMorgan Chase & Co <JPM.N>
was in talks to quintuple its offer to buy Bear Stearns Cos
<BSC.N> to $10 per share, suggesting that there may be more
value in financial assets than previously thought.
JPMorgan's original agreement on March 16 to pay $2 per
share for the stricken Bear, was widely considered a fire-sale
price after the Wall Street bank saw the value of its
investments pummelled by a meltdown in the subprime mortgage
market.
"It (the new price) could be a relief for financial stocks
and maybe a sign that the worst for the mortgage-backed debt
market has passed," Chua Hak Bin, director Asia-Pacific
economics and markets at Citigroup.
Tokyo's Nikkei index <> traded in and out of the red
to end the session flat, although gains in financial stocks,
such as Mitsubishi UFJ <8306.T>, cushioned the fall. Investors
were braced for the upcoming corporate results season.
Yasuo Yamamoto, senior economist at Mizuho Research
Institute, said sentiment at manufacturers has deteriorated as
expected as rises in the yen and crude oil prices have weighed.
"Japanese firms will face a severe situation in terms of
profits around the first half of fiscal 2008-09," he said.
TAIPEI CELEBRATES
Taiwan markets surged the first trading day after Ma
Ying-jeou of the more China-friendly Nationalist Party, or
Kuomintang (KMT) won the presidential poll, boosting hopes for
a greater flow of tourists, trade and capital between Taiwan
and China.
Ma has pledged to boost business ties with rival China to
jumpstart the economy of the self-ruled island Beijing claims
as its own.
Taiwan's main TAIEX <> jumped more than 6 percent at
the open -- its biggest one-day percentage gain in more than
seven years -- before easing back to a gain of 4 percent.
The Taiwan dollar <TWD=TP> also jumped to a 10-year high of
T$30.218 against the U.S. dollar.
Elsewhere in the currency markets the dollar rose 0.2
percent against the yen to 99.87 yen <JPY=>, keeping distance
from a 13-year low of 95.77 yen hit on electronic trading
platform EBS early last week.
Confidence in U.S. assets was partially restored after the
Federal Reserve unveiled steps to relieve the credit crisis.
Among an array of initiatives, the U.S. central bank pushed
JPMorgan Chase to acquire Bear Stearns, started lending
directly to securities firms for the first time since the Great
Depression and lowered the benchmark fed funds rates by 75
basis points to 2.25 percent.
The yuan <CNY=CFXS> hit a fresh post-revaluation high
against the dollar at 7.0508 for an eighth straight day on
expectations that China would ensure relatively fast
appreciation in the near term to fight inflation.
Oil fell nearly $2 dollars, with U.S. light crude for May
delivery <CLc1> down $1.16 to $100.66 a barrel. Prices dropped
by almost $9, about 8 percent, last week as investors fled the
commodities complex on fears that gains had been overdone,
giving a lift to the beleaguered dollar in the process.
Spot gold <XAU=> changed hands at $909.00/909.80.
(Editing by Lincoln Feast)
