* Euro inches up from four-year lows, Asia stocks up 0.6
pct
* Risk/return slightly favours buying value
* Focus on Chinese data, Trichet comments later in the week
* Global equity valuations at lowest since March 2009
(Repeats to more subscribers)
By Kevin Plumberg
HONG KONG, June 8 (Reuters) - The euro bounced from a
four-year low and Asian stocks rose on Tuesday as traders
paused in their selloff of risky assets ahead of Chinese
economic data and a European Central Bank meeting later in the
week.
Fears about a spreading European sovereign debt crisis, a
slowdown in China and a weak U.S. job market have combined to
sap investors' willingness to take risks for higher returns,
prompting them to dump global equities, high-yield bonds, the
euro and emerging market currencies.
However, the euro has fallen 12 percent so far in the
second quarter -- on track for the biggest quarterly decline
since being launched in 1999 -- and global equities are the
cheapest since the latest bull market started in March 2009.
The pace of decline has enticed some buyers to sift through
the market, with an eye for value.
Japan's Nikkei <> share average rose 0.4 percent while
the MSCI Asia ex-Japan index <.MIAPJ0000PUS> added 0.6 percent.
"We're seeing cherry-picking of shares today. Caution
pervades after the U.S. market's substantial losses and
continued foreign selling, but investors are scooping up some
shares that they're bullish on in the longer-term," said Kim
Jeong-hoon, a market analyst at Korea Investment & Securities
in Seoul.
The euro climbed 0.3 percent to $1.1955 <EUR=>, causing
dealers to cover their bets against the currency and push it up
from a four-year low of $1.1875 plumbed overnight.
Federal Reserve Chairman Ben Bernanke offering his verbal
support, saying European leaders were committed to ensuring the
survival of the euro and have the means to support every
heavily indebted member of the currency union. []
After a policy meeting on Thursday, ECB President
Jean-Claude Trichet will likely face tough questioning on
liquidity provisions in the euro zone and the stability of the
European financial system.
The Australian dollar, a favourite of investors because of
its relatively high interest rate, rose 1.2 percent to
US$0.8200 <AUD=>, retracing almost all of Monday's losses.
FINDING BARGAINS
The Nikkei rebounded after suffering its biggest one-day
fall in 14 months on Monday.
"Though pension funds are likely to emerge to buy at the
lows, even retail investors are starting to get a bit spooked
at this point, so whether they'll buy or not is key," said
Kenichi Hirano, operating officer at Tachibana Securities in
Tokyo.
Hong Kong's Hang Seng index <> was up 0.3 percent on
the day, with gains in index-heavyweight HSBC <0005.HK> winning
out over small losses in other banks and land developers.
As worries grew about the health of the global economic
recovery, short-selling of Hong Kong-listed equities picked up
on Monday to 10 percent of trading volume, with banks making up
the three of the top four most-shorted stocks, a dealer said.
Valuations of global equities have come down quickly in the
last several weeks. The MSCI index of world equities is trading
at 11.4 times its expected 12-month earnings, the lowest since
March 2009.
The uncertain global economic outlook could have an impact
on earnings forecasts, though economists as a whole have not
changed their growth predictions in a big way.
Asian investors are awaiting a flurry of data from China
this week after reports last month indicated growth may have
peaked in the world's third-largest economy.
Though the number of property sales in big Chinese cities
is decreasing, likely pointing to an easing in price pressures,
other indicators do not reflect a massive slowdown in the
world's fastest growing economy or its demand for imported
goods. []
On the contrary, Taiwan's exports to China in May rose 66
percent on year-on-year basis, indicating sustained demand from
a key trade market.
The benchmark 10-year U.S. Treasury yield <US10YT=RR>
rebounded to 3.18 percent after finishing trade in New York
around 3.15 percent.
Still, in the last two months the yield has tumbled 65
basis points, squashed by investors exiting risky trades and
buying Treasuries, particularly late-dated maturities. The
spread between 10-year and 2-year yields has narrowed 37 basis
points since April.
The sliding U.S. dollar put some upward pressure on crude
prices. The July contract <CLc1> was up 0.2 percent to $71.59 a
barrel.
(Additional reporting by Elaine Lies in TOKYO)
(Editing by Kim Coghill)
