* Positive factory data drives most stock markets higher
* Aussie hit by surprise c.bank move keeping rates steady
* European shares seen dipping; U.S. stocks also seen soft
* Yen rises against major currencies; euro slides vs USD
By Dean Yates
SINGAPORE, Feb 2 (Reuters) - Resource stocks lifted Asian
shares off three-month lows on Tuesday after strong U.S.
manufacturing data raised hopes the global economic recovery
was on a firmer footing.
But the Australian dollar <AUD=A4> sank, pulling down the
euro, after the country's central bank left interest rates
unchanged in a move that stunned markets and underscored
investor nervousness about the impact of China's policy
tightening. []
European stocks <> were set to dip as investors
awaited more corporate results and digested the Reserve Bank of
Australia's decision to skip an interest rate rise.
U.S. stock futures <SPc1> also pointed to a softer open
after Wall Street rose 1.1 percent on Monday on the
manufacturing sector data [] []
The RBA, in explaining its decision, cited the impact of
higher mortgage rates at home while noting that China had begun
to rein back stimulus in its economy -- a tightening process
that has transfixed global markets in recent weeks.
Resource-rich Australia has been a major beneficiary of
China's sharp rebound and its seemingly insatiable demand for
metals and other raw materials.
Investors get nervous when "they feel that in the strongest
engine of growth, which is China, there is a little bit of a
brake being put on an extremely fast car", said Khiem Do, head
of the Asia multi-asset group at Baring Asset Management, which
oversees $50 billion.
Japan's Nikkei stock average <> ended 1.63 percent
higher, helped by Toyota Motor Corp <7203.T>, which surged 4.5
percent after it detailed plans on Monday to fix millions of
vehicles equipped with faulty accelerators in North America and
Europe. []
The jump in the world's top automaker comes after about an
18 percent tumble over the last seven business days.
Australian miners were among the best performers in Asia as
metals prices rose on prospects for the world economy. Those
stocks, as well as retailers bouyed by the RBA's decision to
hold interest rates steady, helped Australian stocks <>
rally 1.8 percent.
Asia Pacific stocks outside Japan as measured by MSCI
<.MIAPJ0000PUS> were up 0.22 percent, climbing from 3-month
lows. South Korean <> and Taiwan shares <.TW11> bucked the
overall trend, ending down.
MSCI's Asia exJapan resources index was up 1.7 percent, the
biggest contributor to the rise in Asian shares.
REACTION TO AUSTRALIA RATE DECISION
The yen rose off earlier lows against major currencies
while the Australian dollar <AUD=A4> slid about a full cent
against the dollar in a matter of minutes after the RBA held
its key cash rate steady at 3.75 percent, defying market
expectations for a rate rise to 4.0 percent. []
The sharp reaction in the Australian dollar, a popular
high-yielding investment target, spilled over into other major
currencies, with the euro initially sliding against the dollar.
[]
"It is a surprise given the pace of domestic data," said
Josh Williamson, markets economist at Citi, referring to the
RBA decision.
"It seems the RBA has been buoyed by the Chinese
authorities seeking to reduce some of their stimulus and the
fact there have been lots of market concerns about some
sovereigns."
The Aussie dollar shed 1.1 percent against the U.S. dollar
to $0.8811, and fell 1 percent against the yen to 79.94 yen
<AUDJPY=R>.
The euro fell to an intraday low near $1.3885 <EUR=>, but
later trimmed its losses to stand at $1.3928, little changed on
the day.
Markets are bracing for a big week with other major central
bank meetings across the world and a raft of economic reports
out of the United States, culminating in the non-farm payrolls
data on Friday. [].
Baring's Khiem Do said the key to positive economic data
driving strong stock markets higher this year would be final
demand in the United States, Europe and Japan.
"There is still a big question mark over that, which is why
I think we will continue to see volatility in terms of what
investors think about their growth prospects for this year," he
said, referring to the world's major industrialised regions.
The United States, Europe and Japan have been the slowest
to recover from the 2008-2009 global financial crisis and
government stimulus measures are still a major factor
supporting their economies.
Oil pared gains as the dollar strengthened, with the
market's attention turning to forecasts for steady U.S. crude
inventories after prices topped $75 earlier on optimism about
the economy.
March U.S. crude <CLc1> was up 22 cents at $74.65 at 0640
GMT, after touching $75.44 earlier, a rebound of over $3 from
last week's 2010 lows.
(Editing by Kim Coghill)
