* Asian shares up on global econ hopes; resource stocks
lead
* Oil prices extend gains after hitting 7-mth high on Thurs
* Safe-haven dollar dips; sterling falters on PM Brown
woes
(Repeats to more subscribers)
By Rafael Nam
HONG KONG, June 5 (Reuters) - Asian shares, oil and
higher-yielding currencies rose on Friday as hopes for a global
economic recovery drove up appetite for riskier assets, but
traders were cautious ahead of U.S. monthly job data.
Sterling remained under pressure as political uncertainty
deepened in Britain, with a third senior minister quitting the
government and calling on Prime Minister Gordon Brown to step
down to improve his party's chances in the next general
election. []
U.S. markets climbed on Thursday as optimistic investors
focused on positive signals seen in U.S. weekly jobless
benefits and productivity data, downplaying bearish evidence
that American consumers, the lynchpin of global exports, are
cutting spending.
U.S. nonfarm payrolls data due later in the day are
expected to show U.S. employers cut 520,000 jobs in May, lower
than 539,000 in April, but the unemployment rate is forecast to
rise to 9.2 percent from 8.9 percent in April.
A much worse-than-expected report could dampen expectations
that the worst is over for the global economy, hopes that have
pushed stock markets from Seoul to London sharply higher since
early March.
"If the numbers are better than expected investors will get
confirmation that the economy's really improving but there's
worry about what will happen if the figures are worse than
consensus," said Yumi Nishimura, a deputy general manager of
the investment advisory section at Daiwa Securities SMBC.
The MSCI index of Asia-Pacific stocks outside Japan
<.MIAPJ0000PUS> rose 0.9 percent as of 0215 GMT, rebounding
from a 1.9 percent fall on Thursday. The index looked set for a
rise of close to 3 percent on the week, which would take its
gains since hitting early March lows to around 63 percent.
Resource shares were among the leading gainers after oil
prices surged to a seven-month high on hopes that the global
recession had bottomed out. Japanese oil and gas field
developer Inpex <1605.T> surged 6.8 percent.
Australian-listed shares of BHP Billiton <BHP.AX> and Rio
Tnto <RIO.AX> jumped over 10 percent after they announced they
will combine their major Australian iron ore operations. The
news pushed up Australia's main stock index <> more than 1
percent. []
The deal effectively scuppered a $19.5 billion bid by
China's Chinalco [] to secure a stake in debt-laden
Rio.
Japan's Nikkei average <> rose 0.6 percent, while Hong
Kong <> rose half a percent. Elsewhere, markets such as in
Taiwan <> and Singapore <.FTSTI> posted more modest gains.
Gains in Asian shares were also underpinned by data on
Thursday showing fewer U.S. workers filed new claims for
jobless benefits for a third straight week last week and
productivity rose faster than expected in the first quarter.
[]
An upgrade by RBC Capital Markets of the U.S. banking
industry to "overweight" also helped drive Wall Street higher,
with major U.S. indexes gaining around 1 percent.
[]
ECB ON HOLD
Still, not all signals have been positive.
Most U.S. retailers posted disappointing May sales as
recession-weary shoppers cut spending, despite early signs of
stabilization such as improving consumer confidence. A
sustained rebound in consumer demand is vital to a global
economic recovery. []
In another worrisome sign, U.S. mortgage rates surged to
their highest in almost six months in the latest week, despite
government efforts to keep rates at low levels that will help
the hard-hit housing market begin to recover. []
The caution is being reflected by central banks worldwide.
The European Central Bank on Thursday kept interest rates on
hold at a record low of 1 percent. []
However, President Jean Claude-Trichet left the option open
for further easing after the ECB slashed forecasts for the
16-country economy this year and said growth would not return
until mid-2010.
The Bank of England also left interest rates steady at 0.5
percent on Thursday and said it was on track to complete 125
billion pounds of quantitative easing by August to kickstart
bank lending again. But economists expect it may have to do
even more to lift Britain's economy out of recession.
RISKY BUSINESS
Riskier assets that depend on improving global demand still
gained nonetheless.
U.S. crude futures <CLc1> rose 42 cents to $69.24 a barrel,
building on a rally of more than 4 percent on Thursday.
Also helping drive up oil was Goldman Sachs <GS.N> lifting
its end of 2009 oil price forecast to $85 from $65 and
introducing a new end-2010 forecast of $95. []
In currency markets, investors switched to higher-yielding
plays, though moves were tempered ahead of the U.S. jobs data.
The dollar index <.DXY>, a gauge of the greenback's
performance against a basket of six major currencies, fell 0.1
percent to 79.401.
The euro edged up 0.1 percent from late U.S. trade to
$1.4196 <EUR=>, crawling towards a five-month peak of $1.4339
hit on EBS earlier this week after the ECB kept rates on hold.
After falling as low as $1.6106 earlier, sterling was litle
changed from late U.S. trade at $1.6140 <GBP=D4>.
The resignation of senior government minister James Purnell
on Thursday is seen as a direct attack on Brown and increases
the possibility of a challenge to his leadership of the ruling
Labour Party. A general election is due within a year.
[]
