* Copper prices surge after major quake hits Chile
* Signs of European help for Greece underpin equity gains
* China manufacturing data shows growth moderating
* Sterling slumps to 9-mth low on political uncertainty
By Umesh Desai
HONG KONG, March 1 (Reuters) - Copper prices jumped to
their highest levels in five weeks on Monday after a massive
earthquake in Chile, the world's top producer of the metal,
though markets later trimmed gains on worries about slowing
demand in China.
But Asian equities, highly sensitive to global risk
appetite, were firm as signs emerged that Greece's debt crisis
could be easing.
Australian and Japanese shares rallied early, driven by
gains in local mining stocks as disruptions in Chile forced the
shutdown of up to a fifth of the country's copper mine
capacity. The 8.8-magnitude quake on Saturday, one of the
world's most powerful in a century, killed more than 700 people
and dealt a serious blow to infrastructure in one of Latin
America's most stable economies. [].
Shanghai benchmark third month copper <SCFc3> leapt by its
5 percent daily limit in eary trade before retreating, but was
still up 3 percent by late morning. The 3-month copper contract
on the London Metal Exchange <CMCU3> struck an early high of
$7,600 a tonne before easing to $7,410.
Prices pared gains after data showed the pace of
manufacturing in China, the world's largest consumer of copper,
slowed more sharply than expected last month. Output and new
orders continued to expand but the growth rate for export
orders fell, an official survey of Chinese purchasing managers
showed on Monday. []
"The Chinese PMI data is likely to hit prices of metals and
metal producers but going foward the Greek situation would be
more important," said Dariusz Kowalczyk, chief investment
strategist at SJS Markets Ltd in Hong Kong.
Greece may soon announce new steps to cut its budget
deficit, a government minister said on Sunday, amid signs that
Athens might be nearing a deal with European Union governments
to ease its debt crisis. []
The MSCI index of Asian shares excluding Japan
<.MIAPJ0000PUS> was up 0.9 percent as risk appetite improved
with consumer staples and financials accounting for most of the
gains.
The jump in copper prices stoked Japan's Nikkei average
<>, which climbed 0.5 percent as metal shares such as
Sumitomo Metal Mining Co <5713.T> rallied 2.4 percent.
"There may be a view in the market that resources will be
bought after Chile's quake, but given worries about economic
growth in Europe, gains in the price of resources will likely
be limited," said Fumiyuki Nakanishi, manager at SMBC Friend
Securities.
Australia's benchmark stocks index the S&P/ASX 200 <>
index rose 0.6 percent, with mining shares underpinning the
gains, but trade was thin ahead of a Reserve Bank of
Australia's interest rate decision on Tuesday.
Markets in Australia are pricing in a 60 percent chance
<CSRBA=CSAU> of a 25-basis-point rate rise to 4.0 percent. But
after last month's surprise decision when the central bank left
rates unchanged, investors are wary of betting on its next
move.
Growth-linked currencies such as the Australian dollar
<AUD=D4> and the New Zealand dollar <NZD=> both weakened after
the China manufacturing data.
The Australia dollar dropped to a low of $0.8957, from
$0.9004. China is the biggest buyer of Austrlia's commodity
exports.
CURRENCIES
Sterling fell to a nine-month low against the U.S. dollar
and dived to a one-year low on the yen, on the back of growing
political uncertainty as an opinion poll pointed at the risk of
a hung parliament.
Traders said that could undermine an already fragile
economic recovery, prompting many to add to short positions in
the pound <GBP=D4>. It dropped to as low as $1.5129, from
$1.5235 late in New York on Friday. It has shed more than 6
percent this year against the U.S. dollar.
Sterling also fell to its lowest in a year on the yen,
dropping to as low as 134.50 yen <GBPJPY=R>, its weakest since
March 2009 [].
The yen, pared some of its gains, easing to 89.03 per
dollar from 88.86 late on Friday in New York.
THe U.S. dollar rose 0.2 percent against a basket of major
currencies <.DXY> after data on Friday showed U.S. gross
domestic product expanded at a 5.9 percent annual rate in the
fourth quarter, faster than the 5.7 percent pace estimated
earlier.
(Additional reporting by Aiko Hayashi in TOKYO)
(Editing by Kim Coghill)
