* Upbeat U.S. data helps Asian stocks rise
* Oil off session high in choppy trade
* Euro seen underpinned ahead of ECB meeting
(Updates prices)
By Ian Chua
SYDNEY, March 3 (Reuters) - Upbeat U.S. economic news helped
lift Asian stock markets on Thursday, while crude oil prices
fell in choppy trade on reports of a possible peace deal for
Libya.
U.S. stock index futures were also firmer,
suggesting a positive start for Wall Street.
Markets kept a wary eye on developments in Libya as the
struggle between Muammar Gaddafi's loyalists and rebels who have
taken swathes of Libya intensified, but one report said Gaddafi
and the president of the Arab League had agreed to a peace plan
from Venezuela's President Hugo Chavez.
The worry was that growing instability in key Middle East
oil producing countries could signal another threat to global
supplies. Bank of America Merrill Lynch analysts argue the oil
shock from Libya ranks as the eighth largest supply shock since
1950.
"The stability of the region has gone through a major shock
and the ripples are going to be felt for a while," said Carl
Larry, president of Oil Outlooks and Opinions based in Houston.
Gold, often sought in times of heightened geopolitical
tensions and as an inflation hedge, slipped to around $1,424 an
ounce , down from a record high just above $1,440.
Tokyo's Nikkei average closed 0.9 percent higher, a
day after it suffered its biggest fall this year, while stocks
elsewhere in Asia gained 1.1 percent.
"It's too early to be optimistic because concerns about
rising oil prices will likely persist," Masumi Yamamoto, a
market analyst at Daiwa Securities Capital Markets, cautioned.
"But investors might have oversold yesterday, so they may
buy back stocks with good fundamentals."
South Korea's KOSPI , which plumbed a three-month low
on Wednesday, was among the best performers in the region,
advancing 2.2 percent on the day.
Hong Kong's Hang Seng index gained 1.0 percent, while
China's Shanghai Composite Index was steady.
U.S. crude fell 1.2 percent to $101.06 a barrel,
reversing earlier gains, but was still not far from the recent
peak at $103.41. Brent crude shed 1.4 percent to
$114.71, pulling away from the Feb. 24 high near $120.
Wall Street eked out small gains on Wednesday with the S&P
500 index ending 0.2 percent higher after the Federal
Reserve's Beige Book suggested economic activity picked up in
2011 and a private survey pointed to strong private-sector
hiring.
The private-sector jobs report bodes well for the
influential non-farm payrolls data due on Friday.
EURO PINS HOPES ON ECB
In the currency market, the euro held its ground against the
dollar after rallying to near four-month highs against the
dollar. The single currency is expected to stay supported ahead
of the European Central Bank policy meeting.
Markets expect the ECB to sharpen its anti-inflation
rhetoric, reinforcing views the ECB will raise interest rates
before the U.S. Federal Reserve.
The euro last traded at $1.3866 , having climbed as
high as $1.3890. The dollar index , which tracks its
performance against a basket of major currencies, was little
changed on the day at 76.680, hovering near the overnight low of
76.529, its lowest since early November 2010.
Still, some analysts warn the rally in the euro will
probably fizzle after the meeting.
"There has been a lot of hype in the market on the ECB for
some time, so I expect the euro to lose steam pretty much
regardless of what the ECB does today," said Teppei Ino,
currency analyst at the Bank of Tokyo-Mitsubishi UFJ.
(Additional reporting by Luke Pachymuthu in Singapore and Ayai
Tomisawa and Hideyuki Sano in Tokyo; Editing by Tomasz Janowski)
