* China CPI shows lower than expected annual inflation
* Nikkei logs 10-mth high, Shanghai shares at 2-mth high
* Copper hits record high on China inflation data
By Hideyuki Sano and Nick Trevethan
TOKYO/SINGAPORE, Feb 15 (Reuters) - Asian stocks were
broadly steady On Tuesday after traders took China's
closely-watched inflation data in their stride, while the euro
regained some ground after hitting a three-week low the previous
day.
London copper futures rallied to a record high after lower
than expected consumer price figures from China soothed concerns
that Beijing might adopt a more aggressive monetary tightening
regime to fight inflation.
Chinese consumer price inflation accelerated to 4.9 percent
in the year to January. It matched the widespread figure that
swirled through markets on Monday, but was below the earlier
consensus forecast of 5.3 percent.
Analysts remained wary of a build-up in China's price
pressures, saying Beijing could raise interest rates further,
given continued rises in food prices.
"The data probably slightly eased expectations of immediate
tightening, although in the overall scheme of things, this
doesn't change the fact that China is still in a tightening
phase," said Etsuko Yamashita, chief economist at SMBC.
MSCI's Asia Pacific index excluding Japan ,
which snapped five straight sessions of losses on Monday, was up
0.08 percent.
The Shanghai stock market rose more than 1 percent
by 0540 GMT, compared with a rise of 0.38 percent before the
Chinese inflation data came out. On Monday, it jumped 2.5
percent on market rumours of the inflation data.
Japanese stocks edged higher to log a 10-month
closing high. The Nikkei average ended up 0.20 percent at
10,746.67.
South Korea's KOSPI gave up some initial gains,
weighed by falls in automakers including Hyundai Motor
, while Hong Kong stocks fell 0.45 percent.
EURO INCHES UP, BUT TREND WEAK
In the currency market, the euro edged up 0.24 percent to
around $1.3520 , after falling as low as $1.3426
overnight, as traders tried to take out stop-loss orders.
But uncertainty remained over concrete solutions to Europe's
fiscal problems, keeping the euro vulnerable. Worries about
rescue plans for ailing German lender WestLB have also added to
the single currency's struggle.
On Monday, euro zone finance ministers agreed that
a permanent rescue mechanism, the European Stability Mechanism,
to be set up from 2013, would total 500 billion euros, but are
waiting for leaders' guidance to agree changes to the existing
bailout fund .
Traders are also focusing on U.S. retail sales data for
clues on the dollar's near-term outlook. The figures, due later
in the day, are expected to show a 0.6 percent rise in January
from the previous month.
"The greenback may regain its footing over the next 24 hours
of trading as the economic docket is expected to reinforce an
improved outlook for future growth," said David Song, currency
analyst at DailyFX.
European GDP data, also due out on Tuesday, is expected to
show slight growth in the euro zone.
Against the yen, the dollar rose 0.18 percent to
around 83.45 yen , nearing a three-week high of 83.68 yen
set on Friday.
There was muted reaction after the Bank of Japan left its
policy rate unchanged steady, as expected.
The Aussie rose to the day's high of around $1.0058
after China's CPI data eased worries about aggressive monetary
tightening by the world's No.2 economy, which attracts
Australian exports.
Subdued expectations of more aggressive rate hikes
by China also helped send three-month copper on the London Metal
Exchange to as much as $30 to $10,190 a tonne. Spot gold
also inched higher.
London crude prices extended gains to
stand above $103 a barrel, buoyed by signs of firm oil demand in
China, and as unrest in the Middle East sparked fears of a
potential supply disruption.
U.S. crude for March delivery rebounded above $85 a
barrel, after falling to 2-1/2 month lows in the previous
session.
(Writing by Yoko Nishikawa; Additional reporting by Ian Chua in
Sydney, Taiga Uranaka in Tokyo, and Jennifer Tan in Singapore;
Editing by Daniel Magnowski)
