* Brent crude jumps 1% on Libyan violence
* Higher oil may put more pressure on equities
* Asia-ex Japan equity funds see big outflows - EPFR
* Asian FX outlook brightens as more gains seen
By Saikat Chatterjee
HONG KONG, Feb 21 (Reuters) - Oil prices jumped by over a
dollar and Asian shares mostly eased on Monday as spreading
tensions in Libya and other oil-producing regions encouraged
some mild profit taking after last week's solid gains.
Further increases in oil prices may see selling pressure
intensify in regional markets which have only recently begun to
recover from a sharp selloff in the opening weeks of 2011.
Higher prices will pose fresh headaches for authorities
already struggling to re-establish their inflation-fighting
credentials in the face of rising food prices.
"I would be worried if the unrest spreads to Saudi Arabia,"
said Benson Wang of Commodity Broking Services in Sydney.
Brent crude oil futures and U.S. crude futures
both vaulted more than $1/bbl to $103.75 and $87.39 per
barrel respectively, while gold prices inched higher,
adding to last week's gains of nearly 3 percent.
Anti-government protesters rallied in Tripoli's streets at
the weekend, tribal leaders spoke out against leader Muammar
Gaddafi, and army units defected to the opposition as oil
exporter Libya endured one of the bloodiest revolts to convulse
the Arab world.
The MSCI's index of Asia Pacific shares outside Japan
slipped by half a percent after posting its best
weekly performance in two months last week. The energy sub-index
rose 0.5 percent, the outperformer for the day.
The Nikkei ended 0.1 percent higher.
Beijing's latest move to tighten policy in the form of
raising banks' required reserves saw Shanghai and Hong
Kong stocks slip early, but Shanghai later reversed the
losses, rising about 0.6 percent.
"There are few buying or selling cues in the domestic
market. Investors will likely stay alert to geopolitical news
that could affect markets across the world," said Hikaru Sato, a
senior technical analyst at Daiwa Securities Capital Market.
"The Middle East continues to be a focus, while there are
concerns about China."
Asia-ex Japan equity funds saw the biggest weekly outflows
in the second week of February in three years while Japan funds
posted their biggest weekly inflow in four years, data from fund
tracker EPFR Global showed.
Moreover, concerns that a breathtaking rally in U.S. stocks
in recent weeks, which has boosted the region's developed
markets such as Australia and Tokyo may be
nearing a close, also weighed on sentiment.
U.S. markets are shut on Monday for a public holiday.
China's benchmark short-term money market rate
soared more than 300 basis points on Monday after Beijing on
Friday raised required reserves for banks by 50 basis points to
a record 19.5 percent. .
FX VIEW BRIGHTENS
The foggy outlook for equities in the near term is in sharp
contrast to the view emerging in the region's currency markets,
where analysts are calling for more gains.
Barring the baht, yen and the rupee, all other Asian
currencies have posted substantial gains so far this year,
indicating authorities are allowing more currency strength to
tackle inflation.
A monthly Reuters poll showed investors increased their long
positions on the Indonesian rupiah, Singapore dollar, Philippine
peso and the Chinese yuan while Standard Chartered strategists
recommended overweight bets on Asian currencies.
China's move to nudge the yuan to a record high
in recent weeks has also fueled gains. .
The euro held firm near two-week highs after hawkish
comments from a European Central Bank official kept alive the
prospects for the ECB to hike rates before the Fed. .
The G20 meeting's outcome had little impact on markets after
policymakers reached a fudged accord on how to measure
imbalances in the global economy after China prevented the use
of exchange rates and currency reserves as indicators.
(Additional reporting by Ian Chua in SYDNEY, Francis Kan in
SINGAPORE and Antoni Slodkowski and Ayai Tomisawa in TOKYO;
Editing by Richard Borsuk)
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