* Double-dip fears are in focus, with U.S. and China
slowing
* Australia c.bank, ECB to meet this week
* Bank of China shares drop after $8.8 bln rights issue
By Kevin Plumberg
HONG KONG, July 5 (Reuters) - Asian stocks edged up on
Monday, with investors taking profits on defensive plays and
buying back other beaten down shares, though selling could
resume shortly as the U.S. and Chinese economies are slowing in
tandem.
The U.S. labour market shrank in June for the first time
this year, adding to fears of a sharp global slowdown in the
second half, especially with Chinese manufacturing activity
shifting down and property prices at risk of falling.
"Double-dip fears are the pervading influence on market
psychology at present even as European sovereign concerns
appear to be easing," said Mitul Kotecha, global head of
foreign exchange strategy at Credit Agricole CIB in Hong Kong.
Financial markets reflect a big decrease in risk taking as
a result of perceptions of the global economy. World stocks
have fallen 13.1 percent in the last two months
<.MIWD00000PUS>, the Australian dollar slid 8.7 percent <AUD=>
and emerging market bond yields have risen around 75 basis
points over U.S. Treasuries <11EMJ>.
This week the focus will be squarely on how central banks
will address signs of a coming global slowdown, with the
European Central Bank and the Bank of England both holding
policy meetings and the Reserve Bank of Australia and Bank of
Korea meeting as well. []
Japan's Nikkei share average <> rose 0.4 percent,
though remained within spitting distance of a seven-month low
hit last Thursday.
After falling 5.5 percent last week, some short-term
indicators pointed to oversold conditions, but incoming
economic reports could dictate where the market heads next.
"We're seeing a bit of short-covering now that we're past
the jobs data, but the market is going to want to see a lot of
the other indicators coming up this week, including those
linked to consumer spending," said Nagayuki Yamagishi, a
strategist at Mitsubishi UFJ Morgan Stanley Securities in
Tokyo.
The MSCI index of Asia Pacific shares outside Japan
<.MIAPJ0000PUS> was up 0.2 percent, though gains in resources
and technology shares were mostly offset by declines in
consumer staples, financials and telecom stocks.
Mainland Chinese stocks were Asia's biggest decliners. The
Shanghai composite <> was down 1 percent, bringing
year-to-date losses to 28 percent.
China's fourth-largest lender Bank of China <601988.SS> saw
its shares drop 1.8 percent, the second biggest drag on the
composite index, after the firm raised $8.8 billion in a rights
issue over the weekend.
The company's shares were down 2.3 percent in Hong Kong
<3988.HK> and the heaviest drag on the Hang Seng index, which
was down 0.2 percent <>.
U.S. markets will be closed for a public holiday, probably
keeping trading volumes light for the rest of the global
session.
In currency markets, the euro edged down 0.2 percent to
$1.2535 <EUR=>, gaining only by virtue of the dollar's losses
in the wake of the June U.S. employment report.
Short-term investors in the International Monetary Market
cut their net long dollar position by $2.7 billion to $9.5
billion in the week ended June 29. The decrease in long dollar
positioning coincided with poor U.S. housing data and slowing
in factory activity. []
U.S. crude futures rose 0.7 percent to $72.66 a barrel
<CLc1> after bargain hunters emerged with oil closer to $72.
Indeed, oil prices fell 8.3 percent last week compared with
a 3.9 percent fall in world equity prices, so rebalancing of
portfolios is inevitable.
(Additional reporting by Elaine Lies in TOKYO; Editing by Jan
Dahinten)
