By Sugita Katyal
SINGAPORE, March 9 (Reuters) - Oil prices fell for a
second day on Wednesday as OPEC considered raising production,
pushing up Asian stocks although investors remained on edge
because of the turmoil in the Middle East.
The euro nursed heavy losses early in Asia as worries about
European sovereign debt problems intensified following Moody's
credit rating downgrade for Greece on Monday.
U.S. crude for April dipped to $104.63 a barrel,
easing further from a 2-1/2 year high hit on Monday, after
Kuwait's oil minister said the Organization of the Petroleum
Exporting Countries (OPEC) was considering boosting supply to
offset disruptions in Libya, where government forces are trying
to quash a popular uprising.
North Sea Brent crude fell nearly 50 cents to
$112.60.
An official oil output increase by OPEC would signal the
group's determination to cap prices, but unrest in the region
has fuelled concerns about more supplies being cut off.
"Oil has stopped rising for now, but it hasn't really
retreated to levels that allows aggressive buying in risky
assets, so investors will still be jittery," said Hiroichi
Nishi, general manager at Nikko Cordial Securities.
Japan's Nikkei benchmark extended gains for a second day
after the pullback in oil prices lifted Wall Street but
investors remained worried that high fuel prices could stunt
global economic growth and erode corporate earnings.
By midmorning, the benchmark Nikkei was up 1.3
percent, or 133.52 points, to 10,659.55. The broader Topix index
gained 1.3 percent to 951.07. It broke above its 25-day moving
average, key technical level closely watched by Japanese
traders, now at 10,630.45.
MSCI's index of Asia Pacific shares outside Japan
edged up 0.01 percent, led by gains in consumer
durables and financials.
The Korea Composite Stock Price Index (KOSPI) was up
0.20 percent at 2,000.28 points as of 0205 GMT after crude oil
prices dippped, with banks surging ahead of the central bank's
interest rate meeting on Thursday.
The Bank of Korea is expected to raise rates to curb price
pressures after surprising markets by leaving rates unchanged in
February.
EURO SLIPS
The euro fell for a third straight session against the
dollar, with further pressure likely as investors remained
unconvinced that a European Union summit on Friday to overhaul
the euro zone economies will yield any results.
Concerns about Europe's debt problems have been on the rise
since Moody's cut Greece's credit ratings by three notches on
Monday, signaling more downgrades are on the way and adding to
fears that Athens will have to restructure its debt.
Failure to break through resistance above $1.40 prompted
investors to trim long euro/dollar positions, sending the common
currency to a low around $1.3860 overnight. It last
traded at $1.3881.
With the euro on the back foot, the dollar rose against a
basket of major currencies. The dollar index inched up to
76.776, pulling away from a four-month low of 76.124 set on
Monday.
U.S. stocks rallied as crude prices retreated. The Dow Jones
industrial average rose 1.03 percent, while the Standard
& Poor's 500 Index gained 0.89 percent.
Gold steadied on Wednesday after rising to record highs as
the prospects of further unrest in oil-rich Middle Eastern
countries has driven investors to seek safe-haven assets.
Gold eased below $1,430 an ounce, falling further from
Monday's record high after the drop in oil prices eased some
concerns about inflation. Spot gold was at $1,426.80 an
ounce.
(Writing by Sugita Katyal; Editing by Ramya Venugopal)
