* MSCI Asia ex-Japan stocks index up for 5 straight days
* Rate cuts seen this week from Australia, Britain, euro
zone
* Global economic data reflects rapid slowdown
(Updates prices, adds quote, European outlook)
By Kevin Plumberg
HONG KONG, Nov 3 (Reuters) - Asian stocks rose for a fifth
straight day on Monday on hopes policy efforts to dampen the
impact of the financial crisis would ultimately take hold,
though data still painted an ugly picture of the global
economy.
Investors were also cautiously shopping for bargains after
shares and commodity prices globally in October posted their
biggest decline ever on fears of a deep recession in the world
economy.
Major European stock markets were expected to open up as
much as 2.5 percent, according to financial bookmakers, with
momentum seen carrying over from Asia.
Expectations of more interest rate cuts this week from
Australia, Britain and the euro zone following last week's
reductions from China, India, Japan and the United States,
among others, has at the least slowed the panicked selling of
risky assets that dominated most of October.
"Some weeks back, what were needed were coordinated global
policy responses. Though there have been a few wobbles and
maybe less coordination than ideal, it is difficult not to look
back and consider that we are moving in the right direction,"
said Patrick Bennett, Asia foreign exchange and rates
strategist with Societe Generale in Hong Kong.
"For Asia, a renewed focus on the real economy cannot
ignore the fact of slower global growth and resultant slower
external demand," he said in a note.
The scramble to exit equities, commodities and local
currency emerging market bonds in October had poured money into
yen, U.S. Treasuries and the U.S. dollar, which had its largest
monthly in gain in 17 years. These trends were not expected to
reverse any time soon, but investors were taking advantage of
the relative calm in markets to balance their portfolios.
The MSCI index of stocks in the Asia-Pacific region outside
Japan <.MIAPJ0000PUS> rose 5.9 percent, up for a fifth
consecutive session after having dropped 24.6 percent in
October for its biggest monthly decline in the gauge's 20-year
history.
Hong Kong's Hang Seng index <> climbed 5.3 percent,
with bank shares posting solid gains after a Chinese central
bank official reportedly said Beijing had abandoned its lending
caps in a move that could make funneling money to small firms
much easier. []
The benchmark KOSPI in South Korea <> gained 1.4
percent, boosted by details on a $11 billion government fiscal
stimulus package that officials said would add a full
percentage point to total output. []
Australian stocks <> rose 5.1 percent, while Japanese
markets were closed for a holiday.
RATE CUTS ALL AROUND
The parade of rate cuts from Beijing to Washington and
massive amounts of U.S. dollar liquidity flooding the financial
system have pulled lower lending rates between banks and
improved investor sentiment, despite the strong potential for
higher unemployment and softer consumer spending around the
world.
JPMorgan asset allocation strategists expect gross domestic
product in developed economies in the current and next quarters
to shrink by the most since 1974. They recommended keeping bets
on short-dated government bonds, and against the industrial,
materials and energy sectors in equities.
Growth in Korean exports was at a 13-month low in October,
hurt by crimped demand from both developed and emerging
markets, while a measure of China's factory segment fell to a
record low. The reports underscored the region's biggest
vulnerability to the global slowdown: exports.
Crude prices climbed, with dealers taking cues from
equities and the U.S. dollar. U.S. light crude for December
delivery <CLc1> rose $1.11 to $68.92 a barrel.
Gold in the spot market <XAU=> was trading at $733.00 an
ounce, up $8.95 from New York's notional close on Friday.
"It appears the systemic risk that supported gold through
the heat of the credit crisis has been alleviated somewhat by
the action of the world's central bankers, however, it has not
totally vanished," UBS analyst Glyn Lawcock said in a report on
Monday.
Easing in fear-driven trades pushed up the U.S. dollar
against the yen and pulled it lower against the euro, with
investors bracing for another round of interest rate cuts this
week by the world's major central banks.
The dollar was at 99.43 yen, up from around 98.45 yen
<JPY=> late in New York on Friday. The euro was at $1.2880
<EUR=>, up from $1.2730 on Friday.
U.S. Treasury prices were mostly unchanged, though the
benchmark 10-year note rose 4/32 <US10YT=RR>, pushing the yield
down to 3.96 percent from 3.97 percent on Friday.
In the last week, the difference of the 10-year yield over
the 2-year yield, also called the yield curve, has increased,
especially after the Federal Reserve left the door open for
more rate cuts to stabilise the economy.
(Additional reporting by James Regan in SYDNEY; Editing by
Lincoln Feast)
