(Corrects paragraph 4 to say inventory adjustments, rather
than inventory building and drops reference to rates)
* Shares in Japan, Korea rise; Australia, Shanghai down
* Dollar hits 14-month low vs euro on China reserves
article
* Gold holds below $1,060, oil slips below $80 a barrel
* Hong Kong, New Zealand markets closed for holiday
By Charlotte Cooper
TOKYO, Oct 26 (Reuters) - Shares in Japan and South Korea
rose on Monday, with Seoul lifted by strong economic growth
data, while the dollar slid after a Chinese article said
Beijing should raise its euro and yen holdings in its reserves.
Shares in Europe were set to open flat. Financial
spreadbetters expect Britain's FTSE 100 <>, Germany's DAX
<> and France's CAC <> to open a few points higher.
The MSCI index of Asia-Pacific shares excluding Japan
<.MIAPJ0000PUS> was steady, holding below a near-15-month peak
set last week, while S&P futures <SPc1> were flat, pointing to
a stable start on Wall Street later.
South Korea's economy grew 2.9 percent in the
July-September quarter, its fastest clip since early 2002, but
much of the growth came from inventory adjustments.
[]
The Korea Composite Stock Price Index <> closed up
1.03 percent, lifted by foreign buying, with retailers such as
Shinsegae Co Ltd <004170.KS> gaining on hopes for improving
consumption.
Korean pharmaceutical firm Green Cross <006280.KS> also
helped, rising 14 percent. The United States declared 2009 H1N1
flu a national emergency and the Food and Drug Administration
granted emergency use authorisation for an experimental new
drug for which Green Cross has the sole domestic licence to
manufacture and distribute. []
In Australia, the main index <> ended 0.6 percent
lower as banks slipped ahead of earnings this week, while
Shanghai's main index <> fell 0.3 percent, with
travel-related stocks down on the U.S. flu declaration and
health-related shares up.
Hong Kong and New Zealand markets were shut for a holiday.
Japan's Nikkei average <> ended up 0.77 percent at
10,362.62, its highest close in four weeks, although it is
still well below its 2009 peak. Traders said it was supported
on the charts by its 75-day and 25-day moving averages at
10,250.
Exporters such as Honda Motor Co <7267.T> got some relief
from the yen's recent retreat from strong levels, while
machinery maker Kawasaki Heavy <7012.T> rose on a report of a
high-speed rail project in China.
"The market is optimistic about Japanese earnings as the
reporting season heads into full swing," said Kenichi Hirano,
operating officer at Tachibana Securities.
Japan Airlines <9205.T>, which is seeking aid from banks
and the government, gained 2.63 percent after a report that a
state-backed body would oversee its turnaround. []
DOLLAR TRIPS BUT LOSSES SMALL
On Friday, U.S. shares fell as weak results from industrial
companies overshadowed stronger ones from tech and retail
firms.
The Dow Jones industrial average <> closed down 1.08
percent, the Standard & Poor's 500 Index <.SPX> fell 1.22
percent and the Nasdaq Composite <> dropped 0.5 percent.
[]
The dollar hit a 14-month low against the euro after an
opinion piece in the Financial News, a paper published by the
People's Bank of China, said the dollar should remain the
principal currency in China's foreign exchange reserves but the
share of euros and yen should increase. []
Markets are watching to see how concerned policy makers are
globally about the dollar's recent weakness. European Central
Bank Governing Council member Christian Noyer, speaking in
Singapore, made no comment on the euro against the dollar,
which speculators took as an excuse to push the single currency
higher. [] []
The euro rose as far as $1.5064 <EUR=> while the dollar
slipped 0.1 percent to 91.94 yen <JPY=>.
"The comments from China are pretty strong and that is
supporting the euro," said Tony Bieber, forex analyst at
Suncorp.
The dollar index, a gauge of its performance against six
other major currencies, fell 0.1 percent to 75.365 <.DXY> and
back towards a 14-month low of 74.940 touched last week.
The Australian dollar hovered below a recent 14-month peak,
after producer prices data showed only a modest rise, taking
pressure off the central bank for an aggressive rate rise in
November to follow an increase in October. []
Copper prices rose, with London <MCU3> and Shanghai <SCFc3>
both around 13-month highs, supported by Chinese import data
and the softer dollar. [].
Oil fell for the third day and U.S. crude futures <CLc1>
slipped below $80 a barrel to $79.90 as investors took profits
on cautiousness about the fragility of the global economic
recovery.
Gold <XAU=> held below $1,060. The metal was undermined by
weak physical demand, keeping prices below this month's record
highs above $1,070 per ounce.
U.S. Treasury prices dipped as investors braced for a
record wave of issuance this week, with the December 10-year
future <TYv1> falling 6/32 to 117-13/32.
(Additional reporting by Jungyoun Park in Seoul, Satomi
Noguchi and Aiko Hayashi in Tokyo and Claire Zhang and Edmund
Klamann in Shanghai; Editing by Neil Fullick)
