(Repeating to additional subscribers with no changes to text)
* S.Korea, India shares pare gains on Australian rate rise
* Dollar jumps after denial of Gulf oil report
* Korean mkts rattled, expectations for Korea rate rise
mount
By Susan Fenton
HONG KONG, Oct 6 (Reuters) - South Korean and Indian shares
fell on Tuesday after Australia's interest rate hike showed
that stronger Asian economies were starting to reverse
emergency stimulus policies, hitting markets seen as likely to
lift rates.
European stock futures <STXEc1> were up 0.4 percent while
U.S. equity futures <SPc1> were flat.
The dollar jumped across the board, trimming early losses
after Saudi and Russian authorities denied a report saying Gulf
Arab states were considering using currencies other than the
dollar to trade oil. []
The euro <EUR=> slipped to around $1.4705 compared with
around $1.4730 before the comments. Still, the pair traded 0.4
percent higher on the day, after traders initially sold the
dollar in reaction to the report in UK daily The Independent.
The Reserve Bank of Australia's decision to raise interest
rates, a surprise to many analysts, sent shivers through Korean
financial markets, pushing the benchmark KOSPI index <>
down 0.5 percent, after early gains, while Korean December bond
futures <KTBc1> fell by as much as 22 ticks to 108.86 within
seconds of the rate announcement.
The Australian central bank, said it was prudent to
gradually take back policy accommodation since the worst danger
for the economy had passed, a move analysts said eased pressure
on the Bank of Korea from holding back on raising its own rates
to prevent a property bubble forming.
Australia is the first G20 nation to raise rates since
markets crashed after the failure of Lehman Brothers. The move
puts it ahead of most big developed nations, who show little if
any inclination to tighten policy, and sent the Australian
dollar to a 14-month high above $0.8860 amid speculation of
more increases in coming months.
"The Australian economy is outperforming other advanced
economies and I guess many economists will see the decision
today as a consequence of economic recovery," Australian
Treasurer Wayne Swan told reporters.
Australian shares trimmed gains but still ended the day up
0.4 percent as share markets across the region gained some
support from a report on Monday showing the U.S. services
sector grew last month for the first time in a year, offsetting
disappointment over U.S. payrolls data last Friday.
The MSCI index of Asia Pacific stocks traded outside Japan
<.MIAPJ0000PUS> and the Thomson Reuters index of regional
shares <.TRXFLDAXPU> were both up 1 percent.
MAZDA SHARES SURGE
Gold <XAU=> edged up to as high as $1,020.05 an ounce from
just above $1,015.
The strengthening yen added to concern in Japan that
exporters will suffer as a result although the benchmark Nikkei
share index <> inched up 0.2 percent.
Carmaker Mazda Motor <7261.T> jumped 7.6 percent on news of
a share sale to raise $1.1 billion for investment in hybrid and
other technologies and after it halved its net loss forecast
for the year to March. []
China's markets are closed until Friday for public holidays
but Hong Kong shares were up 0.7 percent.
In Korea, Samsung Electronics <005390.KS>, the world's top
maker of memory chips and flat-screen TVs, announced a
higher-than-expected third-quarter earnings forecast
[] but its shares erased early gains, dipping 0.3
percent in the market slide. Still, they have rallied nearly 70
percent this year as tech stocks outperformed the market.
Asian currencies were generally firmer as the dollar came
under pressure.
The New Zealand dollar <NZD=>, up nearly 50 percent since
early March, touched a 14-month high after data showed a
rebound in business confidence and the market bet the country
could soon follow Australia and raise rates.
The South Korean won <KRW=> hit a one-year high against the
U.S. dollar. It and then retreated on suspected intervention by
the authorities [] while a finance ministry
official told Reuters the authorities were ready to intervene
if the won overshoots fundamentals. []
U.S. crude oil futures <CLc1> stayed above US$70 a barrel,
inching up to US$70.67. The U.S. services data helped oil and
copper prices, which climbed nearly 2 percent to more than
$6,000 a tonne as the dollar struggled.
(Additional reporting by Anirban Nag and Wayne Cole in SYDNEY;
Editing by Jan Dahinten)
