By Louise Heavens
SINGAPORE, March 25 (Reuters) - Asian shares climbed on
Tuesday, and the dollar held its gains, after JPMorgan raised
its bid for Bear Stearns <BSC.N> and U.S. home sales rose
unexpectedly, lifting expectations for a recovery in the U.S.
housing and credit markets.
Japanese government bond futures retreated, pulling away
from last week's five-year highs, after U.S. Treasuries slid on
tentative hopes the world's top economy would weather the
credit crisis.
Financial stocks, from Seoul's Kookmin Bank <060000.KS>, to
Australia's Babcock & Brown <BNB.AX>, rang up big gains after
JP Morgan Chase & Co's <JPM.N> sweetened offer for Bear Stearns
signalled there was more value in financial assets than
previously thought.
MSCI's index of shares outside Asia <.MSCIAPJ> rose 1.9
percent by 0150 GMT, the third day of gains, although the
benchmark is still down around 16 percent this year.
Stocks on Wall Street rallied on Monday after a long Easter
holiday weekend, with the Dow Jones industrial average <>
rising 1.5 percent and the Nasdaq Composite Index <>
gaining 3 percent.
Better-than-expected U.S. housing data also helped to lift
optimism over the economic outlook. []
"If there's even a hint that the U.S. housing slump might
be coming to an end, and combined with an improved offer for
Bear Stearns, it gives people hope that maybe the darkest
period is over," said Hans Kunnen, head of investment markets
research at Colonial First State in Sydney.
"But the market is just operating like a yo-yo within a
band. I refuse to get carried away."
Japan's Nikkei index <> ended the morning 1.3 percent
better as Canon Inc <7751.T> and other exporters climbed as the
yen traded well below a near 13-year high posted last week
against the dollar, easing some concern about earnings
outlooks.
"The yen trading above 100 yen (versus the dollar) makes a
lot of difference for investor sentiment," said Katsuhiko
Kodama, senior strategist at Toyo Securities.
Seoul's KOSPI <> added 1.1 percent, Australia's
S&P/ASX 200 <> rose 3 percent, and Singapore's Straits
Times <.FTSTI> climbed 1.9 percent.
BONDS WEAKEN
June 10-year JGB futures fell 0.34 point to 140.31
<2JGBv1>, pulling away from a five-year peak of 142.00 hit last
week.
The benchmark 10-year JGB yield rose 1 basis point to 1.265
percent <JP10YTN=JBTC>, staying above a three-year low of 1.230
percent hit last Monday.
In the currency markets, the dollar crept up to 100.76 yen
<JPY=>, holding near the previous session's highs hit after
data showed that sales of existing U.S. home sales rose in
February for the first time since July.
The dollar had plunged to as low as 95.77 yen last week,
its lowest since 1995, amid the Federal Reserve's aggressive
efforts to ease the credit crisis.
Oil fell more than $1 to below $100 a barrel, extending a
10 percent fall from last week's record, sent down by a buildup
in U.S. crude stocks, concerns over slower energy demand and a
recovering dollar.
U.S. light crude for May delivery <CLc1> was down 87 cents
at $99.98 a barrel.
"There is a realisation in the market that the fundamentals
really don't justify prices to be so far above $100. One of the
key factors is the recent buildup in U.S. stockpiles and the
stocks are looking pretty healthy at this stage," said Gerard
Burg, a resource analyst at the National Australia Bank.
Gold dropped and held near its lowest in a month, with its
appeal as a hedge against inflation weakened by a firming U.S.
dollar and sliding crude oil prices.
Gold <XAU=> fell to $920.40/921.20 an ounce, and was within
sight of last week's one-month low of $904.65 an ounce.
