* Asia stocks flat, energy and tech share gains underpin
* Dollar little changed, oil steady after topping $79
* Australian, S.Korean swap rates drop after jump
(Repeats to more subscribers)
By Eric Burroughs
HONG KONG, Oct 19 (Reuters) - Asian shares hovered near
14-month highs on Monday, shaking off an early dip after
disappointing earnings from U.S. corporate bellwethers such as
General Electric Co <GE.N> spurred some investors to take
profits.
European shares were set for a slight rise at the start,
with futures on the Dow Jones Euro Stoxx 50 <STXEc1> up 0.3
percent in early trade and tracking gains in S&P 500 futures
<SPc1>.
Oil prices pushed up to a one-year high of $79.05 <CLc1>,
giving a boost to energy-related shares and helping stocks
around the region recover from early selling of financial
shares.
South Korean technology exporters such as Samsung
Electronics <005930.KS> also climbed on a weaker won <KRW=>,
helping lift the KOSPI <> 0.5 percent.
The dollar edged up, thanks mainly to a retreat in the euro
as European policymakers voiced some concerns that the single
currency's surge is approaching levels that would damage the
euro zone's recovery. Eurogroup Chairman Jean-Claude Juncker
said he was concerned about a continuous euro rise.
[]
But the U.S. currency's gains were slight, and activity was
limited as investors focused on what the next batch of
quarterly earnings will say about how companies are managing
the recovery from the deepest global recession in decades.
Some 135 of the companies in the S&P 500 will report
quarterly results this week, with the battered financial sector
expected to post the highest growth rate, according to Thomson
Reuters data. []
"What we're seeing is just profit-taking, with Wall
Street's Friday fall providing the excuse, along with a sense
that the market may have risen too far, too fast," said
Noritsugu Hirakawa, a strategist at Okasan Securities in Tokyo.
After rallying strongly for more than seven months, stocks
have lost some momentum in recent weeks on fears that corporate
earnings expectations are far too optimistic given the still
frail U.S. economy.
The S&P 500 <.SPX> fell 0.8 percent on Friday after results
from GE and Bank of America Corp <BAC.N> highlighted that the
road to recovery will be bumpy.
The benchmark MSCI index of Asia-Pacific shares outside
Japan <.MIAPJ0000PUS> was unchanged and not far from its
14-month peak hit on Thursday. So far this year, the index is
up 65 percent.
Asia ex-Japan shares remain among the top performers in the
world as the region has powered out of the recession the
strongest, while its major companies have benefitted from a
pick-up in demand for electronics.
The Thomson Reuters index of Asia ex-Japan shares
<.TRXFLDAXPU> slipped 0.2 percent, while Japan's Nikkei average
<> edged down 0.2 percent.
CREDIT SPREADS TIGHTEN
The latest run higher in stocks has been accompanied by an
investor shift into Asian fixed-income and credit markets that
has pushed spreads tighter, prompting issuers to roll out new
bonds to take advantage of attractive funding levels.
The iTraxx credit derivatives index of top Asian companies
<ITAIG5Y=MP> was quoted at 95 basis points after shrinking
below the 100 basis points threshold last week for the first
time in 17 months, underscoring the strong demand for higher
yields.
In currencies, the euro was flat at $1.4899 <EUR=> but shed
0.3 percent against the yen to 135.20 yen <EURJPY=R>. The
dollar index, a gauge of its performance against six major
currencies, was unchanged at 75.627 <.DXY>.
Commodities also drifted sideways. U.S. crude oil prices
pared early gains and steadied at $78.53 a barrel <CLc1>, while
gold rose $1.40 an ounce to $1,053.65 <XAU=>.
Government bonds were mixed and swap rates fell in some
countries after having surged in Australia, New Zealand and
South Korea last week on expectations that their respective
central banks will be lifting interest rates in coming months.
The five-year Korean swap rate <KRWIRS> was unchanged at
4.59 percent after reaching 4.60 percent on Friday, a one-year
high. The five-year Australian swap rate <AUDIRS> dropped 1
basis point to 6.04 percent, off a one-year peak of 6.12
percent.
Reserve Bank of Australia Assistant Governor Philip Lowe
said that it was appropriate for the central bank to go back to
a more normal monetary policy setting, reinforcing expectations
another rate hike is coming in November after an increase this
month to 3.25 percent -- the first of the G20 to tighten
policy. []
(Additional reporting by Elaine Lies in Tokyo)
(Editing by Kim Coghill)
