* Nikkei average falls after nine-day rally
* MSCI Asia ex-Japan stocks index still hits 10-mo high
* Eyes on world's biggest IPO this year out of China
* China to begin tightening policy in spring 2010-Merrill
By Kevin Plumberg
HONG KONG, July 28 (Reuters) - Asian stocks were steady on
Tuesday, as investors took a breather after lifting shares some
16 percent in the last two weeks, though the profit-taking urge
was contained by a jump in U.S. new home sales and hopes for
solid corporate results in the region.
Relatively hawkish comments from the governor of the
Reserve Bank of Australia boosted the Australian dollar, after
being down most of the morning, and oil prices also edged down
after U.S. crude hit the highest since July 2 overnight.
Japan's Nikkei share average <> edged down 0.2
percent, after posting a nine-day rising streak, the longest
winning run since 1988.
"High-tech shares that had already rallied are pausing for
now, and clues to further gains in the overall market will
depend on the degree to which investors snap up laggard banking
shares," said Takahiko Murai, general manager of equities at
Nozomi Securities in Tokyo.
Valuations have been recovering from depressed levels in
Japan. However, on a price-to-book basis, the Nikkei is trading
at around 1.3 times compared with the five-year average of 1.8
times, suggesting there may still be pockets of value.
The MSCI index of Asia Pacific stocks outside Japan
<.MIAPJ0000PUS> rose 0.4 percent, racking up a 10 month high.
Gains have sharply outpaced global equity markets, with the
regional index up 69 percent since March 9, when share markets
began a bullish recovery, compared with a 45 percent gain in
the MSCI all-country world index <MIWD00000PUS>.
Hong Kong's Hang Seng index <> rose 0.5 percent in a
choppy session, with index heavyweight China Mobile <0941.HK>
up 1.9 percent.
Investors in mainland China awaited the debut on Wednesday
of China State Construction Engineering Corp, which with
expected proceeds of $7.3 billion, will be the biggest IPO this
year.
The IPO market in China has heated up to the point of
increasing fears of a stock market bubble -- only months after
the worst of the financial crisis has passed.
Sichuan Expressway <601107.SS> tripled in price on its
first day of trade on Monday, though it was down 10 percent on
Tuesday.
Merrill Lynch economists raised their 2009 Chinese gross
domestic product growth forecast to 8.7 percent from 8 percent,
and said winding down measures to boost the economy will happen
beginning in the spring of 2010.
"Though sustainability of China's recovery remains a
concern for some investors, a new concern is when Beijing will
tighten policies. The so-called strategy has become a new focus
for investors," economists Ting Lu and TJ Bond wrote in a note.
The Australian dollar turned positive on the day, trading
up 0.2 percent to $0.8245 after Australia's top central banker
said upside risks to the economy balanced the downside risks.
However, he also warned that low rates should lead to home
building and not just higher prices. []
The euro was largely unchanged against the U.S. dollar
compared with late Monday in New York, trading at $1.4228
<EUR=>. The euro rose to an eight-week high overnight after a
report showed U.S. new home sales rose 11 percent in June, the
biggest monthly rise since 2000.
Oil prices slipped but has risen some $10 in the last two
weeks as investor appetite for risk increased amid improving
global economic signals. U.S. light crude for September
delivery was down 0.5 percent to $68.05 a barrel <CLc1>.
(Additional reporting by Aiko Hayashi in TOKYO)
(Editing by Kazunori Takada)
