(Adds details, update prices)
* Brent oil up more than $2, but still off last week's highs
* Dollar eases vs Swiss franc, off last week's record low
* Euro, Aussie dip on profit-taking
* Outflows from emerging market equities persist -EPFR
By Masayuki Kitano
SINGAPORE, Feb 28 (Reuters) - Asian shares on Monday slipped
back toward a three-month low hit last week, with emerging Asian
equities seen likely to keep lagging developed markets as
investors fret about risks from inflation.
London crude prices rose by more than $2 to $114.37
a barrel and MSCI's index of Asia-Pacific shares fell 0.3
percent to 460.31 , as the worsening situation in
Libya stirred renewed worry about disruptions to oil production.
The recent unrest in the Middle East, which pushed London
crude prices to their highest level since August 2008 of $119.79
last week, has exacerbated worries about inflationary pressures
in emerging Asian economies.
Market players said emerging Asian stock markets may
continue to underperform compared to developed markets such as
Japan and the United States.
"There are strong concerns about inflation based on
excessive liquidity and emerging markets have been hurt more by
this," said Mitsushige Akino, chief fund manager at Ichiyoshi
Investment Management in Tokyo.
"Developed countries...are not raising interest rates while
emerging markets are in the midst of doing so. That is negative
for (emerging market) equities and that trend will probably
still continue," Akino added.
Underscoring the recent trend, MSCI's index of Japanese
shares has risen 4.3 percent so far in 2011
while its Indonesian index has shed 7.7 percent .
MSCI's index of Asia-Pacific shares outside fell to as low
as 454.70 last Thursday, its lowest level since Dec. 1.
Part of that divergence likely reflects position unwinding,
said Adrian Foster, head of financial markets research with
Rabobank International in Hong Kong.
Late last year, massive liquidity driven rallies in global
equity markets helped give a boost to emerging market shares,
Foster said.
"That largely explains why (emerging) equity markets this
year have been quite weak. Just the unwinding of these...
particularly in India and also in Indonesia," Foster added.
A growing aversion to risky assets in the week to Feb. 23
fueled the biggest flows to global bond funds in more than three
months, and turned more investors away from emerging market
stocks, according to fund tracker EPFR Global.
With more than $20 billion leaving emerging market stock
funds since mid-January, it is the longest period of outflows
since the financial crisis deepened in September 2008.
DOLLAR FINDS FOOTING
The dollar found a steadier footing, having rebounded after
hitting a record low against the Swiss franc on Friday, but the
mood remained cautious given tensions in Libya and fears of
contagion.
The dollar last stood at 0.9270 francs , down 0.2
percent on the day but above a record low of 0.9229 hit against
the safe haven Swiss currency on trading platform EBS on Friday.
The euro dipped 0.1 percent against the dollar to $1.3744
, but the single currency was seen staying in favour ahead
of a European Central Bank meeting this week.
"With rising commodity prices, the ECB will likely continue
its tough talk on inflation, increasing the probability of early
ECB tightening," BNP Paribas analysts wrote in a note.
Traders said the euro ran into some profit-taking as did the
Australian dollar, which fell 0.3 percent to $1.0143 .
Elsewhere, benchmark 10-year U.S. Treasuries rose 6/32 in
price to yield 3.394 percent , while gold
edged up 0.3 percent to $1,413.10. Gold, a traditional safe
haven, was on course for a 6.2 percent monthly gain, its biggest
since November 2009.
(Additional reporting by Osamu Tsukimori in Tokyo and Ian
Chua in Sydney; Editing by Richard Borsuk)
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http://blogs.reuters.com/globalinvesting
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http://blogs.reuters.com/macroscope
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