* Balance of economic data shifting to negative from
positive
* Energy, consumer discretionary shares popular
* Weaker emerging FX, Australia dollar push up US dollar,
yen
* Japanese stocks, yen inch up despite record drop in GDP
By Kevin Plumberg
HONG KONG, May 20 (Reuters) - Asian stocks faltered on
Wednesday while the Australian dollar and emerging market
currencies slid, with investors reluctant to keep a near
three-month rally in risky assets going without more good
economic news.
Reports showing an unexpected decline in U.S. housing
starts to a record low and the worst-ever contraction in
Japan's economy in the first quarter prompted investors to
shift money to defensive sectors and trim their exposure to
emerging markets.
A key gauge of Australian consumer sentiment also tumbled
despite rallying equity markets, paving the way for dealers to
take some profits on the Australian dollar's rise on Tuesday
after it earlier hit a seven-month high. []
"Risk appetite has held the upper-hand of late but an
emerging negative balance of recent economic data should be
injecting some caution," said Patrick Bennett, Asia FX and
rates strategist with Societe Generale in Hong Kong, in a note.
Japan's Nikkei share average <> edged up 0.4 percent
in choppy trade despite the grim economic news, with shares of
pharmaceutical companies and trading houses gaining.
Japan's gross domestic product contracted 4 percent on a
quarterly basis, roughly in line with expectations. The outlook
was uncertain, with some economists expecting stimulus spending
to hasten a recovery, while others were concerned that
collapsed exports would continue to inhibit domestic demand.
[]
"Weaker-than-expected figures for capex and private
consumption suggest the negative impact from the export plunge
is spreading to domestic demand," said Hiroshi Shirashi, an
economist with BNP Paribas.
"As such, the Japanese economy may return to growth
temporarily but it could suffer a contraction again
afterwards."
The MSCI index of Asia Pacific stocks outside Japan was
nearly unchanged, after hitting the highest since October 6 on
Tuesday.
The index is still up more than 50 percent from lows in
early March, but like other global benchmarks appears to have
lost steam in recent sessions on fears markets have risen too
far too fast without concrete signs of economic recovery.
Consumer discretionary and energy stocks were the few
sectors not in the red on Wednesday, although there were no
clear themes to trading, with position adjustments dominating.
Hong Kong's Hang Seng index <> slipped 0.4 percent,
with property stocks under fire, though the sub-index <.HSCE>
of mainland companies listed in Hong Kong edged up 0.2 percent.
China continues to embody the hopes that Beijing can
essentially spend its way to a recovery which will spill over
to the rest of the region. To jump start domestic spending, the
government said on Tuesday it would increase a subsidy scheme
to 5 billion yuan ($733 million) from 1 billion yuan to
encourage purchases of automobiles and home appliances.
[]
It was not clear if this was new spending.
Those hopes had inspired buying of the Australian dollar and
emerging Asian currencies. However, dealers were cutting their
exposure to those currencies and buying back U.S. dollars and
yen on Wednesday.
The Australian dollar fell 0.4 percent on the day <AUD=>,
at around US$0.7700 after earlier rising to a seven-month high
of US$0.7784.
The U.S. dollar strengthened broadly against regional
currencies, rising 0.7 percent against the South Korean won
<KRW=> and 0.8 percent against the Phillipine peso <PHP=>.
The dollar slid 0.4 percent against the yen to 95.58 yen
<JPY=>, having carved out a range of about 94.50 to 101.00 in
the last three months.
U.S. crude for July delivery <CLc1> edged down 0.4 percent
to $59.88 a barrel after rising to a six-month intraday high of
$60.48 a barrel on Tuesday after refinery problems raised fears
about tight supply in the summer.
(Editing by KimCoghill)
