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By Anshuman Daga
SINGAPORE, March 25 (Reuters) - Asian shares jumped on
Tuesday after JPMorgan raised its bid for Bear Stearns <BSC.N>
and U.S. home sales rose unexpectedly, boosting expectations
for a recovery in the U.S. credit and housing markets.
Financial spreadbetters expected stock indexes in London
<>, Paris <> and Frankfurt <> to open between
1.7 and 2.6 percent higher as investors returned from a
four-day break cheered by the news from the United States.
Japanese government bond futures retreated, pulling away
from last week's five-year highs, after U.S. Treasuries slid on
tentative expectations the world's top economy would weather
the credit crisis. The dollar gave up earlier gains to trade
lower versus the yen.
Financial stocks, from Singapore's United Overseas Bank
<UOBH.SI> to Australia's Babcock & Brown <BNB.AX>, notched up
big gains as JP Morgan Chase & Co's <JPM.N> five-fold increased
offer for Bear Stearns suggested there was more value in the
battered sector than previously thought. []
"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."
MSCI's index of Asia shares outside of Japan <.MSCIAPJ>
added 3.5 percent by 0600 GMT, its biggest daily gain since
late January and up for the third straight session. The
benchmark is however still down 15 percent this year.
U.S. shares climbed on Monday after the Easter holiday
weekend, with the S&P 500 index <.SPX> rising 1.5 percent and
the Nasdaq Composite Index <> gaining 3 percent.
Stronger-than-expected U.S. housing data also helped to
lift optimism over the economic outlook. []
Japan's Nikkei index <> closed up 2.1 percent as Canon
Inc <7751.T> and other exporters climbed as the yen traded well
below a near 13-year high hit last week against the dollar,
easing some concern about the outlook for earnings.
Seoul's KOSPI <> rose 1.5 percent, Australia's S&P/ASX
200 <> gained 3.7 percent and Hong Kong's Hang Seng Index
<> jumped 4.5 percent.
The Vietnam index <> however fell 4.7 percent, down for
the eighth day in a row as recent plans by the government to
buy stocks failed to boost investor confidence dented by
surging inflation and tighter monetary policy.
BONDS WEAKEN
June 10-year JGB futures <2JGBv1> fell as much as 0.50
point to 140.15, moving further away from a five-year high of
142.00 hit last week as stock gains grew.
In the currency markets, the dollar fell back towards the
psychologically key 100 yen mark, giving up earlier gains made
after better-than-expected U.S. housing data had revived some
optimism towards the U.S. economy.
The dollar had rallied broadly on Monday also on news that
JPMorgan had raised its offer for Bear Stearns, which boosted
investor appetite for risk.
"The big question now is whether the dollar's recovery was
only a position adjustment before the holidays or something
more that could rattle the global markets later on," said
Haruhisa Takagi, head of the forex trading group at Sumitomo
Mitsui Bank.
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 for a fourth day in a row, dipping briefly below
the $100 mark, extending a 10 percent fall from last week's
record, damaged by by a buildup in U.S. crude stocks and
concerns over slower energy demand.
U.S. light crude for May delivery <CLc1> was down 52 cents
at $100.34 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 <XAU=> rebounded to $924.60/925.4 an ounce, but was
within sight of last week's one-month low of $904.65 an ounce.
