* Asian shares hit 3-week high as new U.S. president
elected
* Dollar recovers after steep slide in prior session
* U.S. Treasuries fall; U.S. stock futures flat
* Oil falls on profit-taking after previous day rally
(Repeats to additional subscribers with no change to text)
(Updates Asian prices after Obama wins U.S. elections)
By Rafael Nam
HONG KONG, Nov 5 (Reuters) - Asian shares hit a three-week
high and the dollar extended gains after Barack Obama became
the next U.S. president, ending uncertainty about who will lead
the world's largest economy in the midst of great financial
peril.
U.S. Treasuries fell as investors became bolder in taking
risk, though U.S. stock futures remained little changed and oil
succumbed to profit-taking after signs of global production
cuts had sent crude prices up 10 percent on Tuesday.
The new Obama administration, which takes office in
January, will face the world's worst financial crisis since the
Great Depression, and a potentially steep slowdown in the
global economy that has pounded markets from Tokyo to Frankfurt
to New York.
Unprecedented measures to rescue banks across the world,
aggressive rate cuts by central banks, and the improvements in
credit markets have in the last week given global markets a
respite from a thrashing, but some still urged caution.
"The knee-jerk complacency rally in Asia to an Obama win is
likely creating an opportunity to sell," said Kirby Daley, a
senior strategist for Newedge Group in Hong Kong.
"The bottom line is economic fundamentals in the U.S. are
deteriorating faster than the market can keep up with. And
there is very little an Obama administration can do to shield
Asia from the effects of this downturn."
The MSCI index of Asian stocks outside Japan
<.MIAPJ0000PUS> rose for a seventh consecutive session on
Wednesday, with its 3.2 percent gain as of 0450 GMT placing the
index at the highest since Oct. 16.
The gains came after U.S. stocks on Tuesday enjoyed their
biggest election day rally ever.
Tokyo's Nikkei <> rose 2.6 percent, led by exporters
such as Honda Motor Co <7267.T> that were bolstered by a softer
yen, while energy-linked firms such as Mitsubishi Corp <8058.T>
gained on the oil price rally.
Markets in Shanghai <>, Hong Kong <> and Singapore
<.FTSTI> rose more han 4 percent each, while stocks in
Australia <> gained more than 2 percent. South Korea
<>, India <> and Taiwan <> saw more muted
gains.
DOLLAR ADVANCES
In a measure that investors may be more willing to add
risk, U.S. Treasury prices fell after Obama's win. The 2-year
note's price traded down 3/32 <US2YT=RR> for a yield of 1.44
percent.
The dollar advanced following Obama's election, recovering
some of the prior days losses that saw the currency suffer its
biggest one-day slide in 13 years when investors went searching
for higher yielding currencies.
"(Obama's win) is arguably likely to prove more positive
for foreign markets given the perception that he will be
stronger in terms of dealing with US economic problems, is seen
more favourably by foreigners generally, and is less likely to
follow the policies of President Bush," Calyon said in a
report.
The dollar rose 0.7 percent against a basket of major
currencies to 85.187 <.DXY>. The euro hit the day's low of
$1.2830 <EUR=> after the projection of a win for Obama, and was
down 0.9 percent from late U.S. trade at $1.2868 at 0423 GMT.
The dollar dipped 0.1 percent to 99.66 yen <JPY=>.
Oil <CLc1> remained lower after the U.S. presidential
election, with crude down $1.50 to $69.05 a barrel as investors
took profits after a spike the previous session following signs
that Saudia Arabia and other OPEC members had made promised
cuts in crude production.
(Editing by Lincoln Feast)
