By Rafael Nam
HONG KONG, March 4 (Reuters) - Asian stocks edged higher on
Tuesday, recovering from the previous session's tumble as the
dollar halted its precipitous slide, while gold and platinum
hovered at or near record highs.
Along with booming metals prices, oil prices are near an
all time peak and agricultural commodities are also trading at
record highs as supply shortages and investment flows pump up
prices.
The concerns that the U.S. economy is at or entering a
recession are creating a cycle: a plunging dollar sparks a
rally in commodity prices, which in turn hit stocks further as
a weakening global economy may now also have to deal with
inflationary pressures.
But some analysts said gains in commodities could not
continue indefinitely.
"The rally defies conventional thinking. Each time lousy
(economic) numbers come out, prices go higher. Even when Warren
Buffett said the United States is in recession, the market just
went barreling ahead," MF Global analyst Edward Meir said.
MSCI'S measure of Asian stocks outside Japan
<.MIAPJ0000PUS> rose 0.4 percent as of 0200 GMT, rebounding
after suffering its biggest percentage decline in six weeks on
Monday.
The index has dropped 11.4 percent this year as of the
previous session amid fears about further losses in the global
financial sector and the impact on the export-dependent region
from a slowing U.S. economy.
Japan's Nikkei benchmark average <> rose 0.7 percent,
rebounding from a six-week low earlier in the session, though
financial shares such as Sumitomo Mitsui Financial Group
<8316.T> remained weak amid continued credit concerns.
Credit- and subprime-related concerns are again scaring
investors after U.S. mortgage lender Thornburg Mortgage Inc
<TMA.N> plunged on Monday amid worries it was facing
bankruptcy, and following more brokerage downgrades of global
lenders.
Australian stocks <> were down nearly 1 percent, as a
widely expected hike in domestic interest rates pressured
financial firms.
"We are still waiting for the fog to clear and work out who
has got bad debts and what the exposure is," said Hans Kunnen,
head of investment markets research at Colonial First State in
Australia.
Markets in South Korea <> and China <> were up
less than 1 percent each, though Taiwan <> and Hong Kong
<> gained more than 1 percent ech.
SURGING METALS
Spot platinum <XPT=> hit a record $2,243 an ounce, up from
$2,230/2,237 late in New York on Monday as the weakening dollar
and supply problems in main producer South Africa triggered
speculative buying.
Spot palladium <XPD=> tracked the rally as well, jumping at
one point to a 6-1/2-year high.
Gold <XAU=> stayed within sight of Monday's record of
$989.30 an ounce, trading in Asia at $985.40/986/20.
Oil prices remained steady as well, with U.S. crude for
April deliver <CLc1> up 6 cents at $102.52 a barrel on the
Globex electronic trading platform, off a record $103.95 hit on
Monday.
The dollar steadied above record lows hit on Monday against
the euro and a basket of currencies after euro zone officials
expressed concerns about the sharp rise of the single European
currency.
"The dollar's downside is seen limited and the market will
likely take a break this session from the heavy selling of the
past few days as players cover short positions," one dealer
said.
The dollar was steady against the Japanese yen <JPY=>,
trading at 103.39.
