* Overnight gains on Wall St support Asian stocks
* Crude rallies $3 a barrel, dollar retreats
* Deep recession fears linger
By Rafael Nam
HONG KONG, Oct 17 (Reuters) - Asian shares gained
tentatively on Friday, recovering some of the steep losses in
the prior session, after encouraging earnings signals from
technology firms such as IBM eased some of the concerns over a
global recession.
A strong day in Wall Street on Thursday, with the Dow Jones
industrial average <> up more than 4 percent, helped
underpin the gains, but investors remained largely cautious
about the near-term outlook given continued signals the global
economy is headed for a potentially deep recession.
[]
The equity gains helped lift U.S. crude futures by nearly
$3 a barrel, and contributed to a halt in the dollar's rally
against the euro and other major currencies. Other commodities,
however, tumbled amid worries about waning global demand.
"There's still nervousness in the market about the real
economy, but in terms of valuations the price is good right
now," said Nagayuki Yamagishi, a strategist at Mitsubishi UFJ
Securities in Japan.
"The economic problems are the main theme of the market
right now and everybody knows this, so rises will be limited."
The MSCI index of Asia-Pacific stocks outside Japan
<.MIAPJ0000PUS> rose 0.6 percent as of 0155 GMT, following an
8.2 percent slump in the previous day.
The index has advanced 0.4 percent for the week as of
Thursday, and is headed for its first weekly gain since the end
of August.
The gains came following encouraging signals on the
earnings front. International Business Machines Corp (IBM)
<IBM.N>, the biggest technology services company, said on
Thursday it expects to meet long-term profit forecasts, partly
due to continued growth in emerging markets. []
Meanwhile U.S. firms such as Internet search leader Google
Inc <GOOG.O> and chip maker Advanced Micro Devices Inc <AMD.N>
posted results that beat expectations.
The earnings results helped take some of the sting off
signals that the U.S. economy is slowing. Data on Thursday
showed industrial output posted its biggest drop since 1974 in
September, while a regional factory index slumped and labour
markets showed softness. []
Japan's Nikkei average <> rose 1.4 percent, clawing
back after falling 11.4 percent on Thursday in its biggest loss
since the 1987 crash.
Singapore's stocks <.FTSTI> rose 0.3 percent, while
Shanghai's main index <> advanced 0.7 percent.
But other major indexes in the region fell. South Korea's
KOSPI <> dropped 3 percent amid continued nervousness
about the health of the country's banking sector.
Taiwan's index <> was down more than 2 percent, while
Australian stocks <> erased earlier gains to fall 0.7
percent.
The gains in equity markets, however tentative, bolstered
oil prices. U.S. crude futures for November delivery rose $2.7
to $72.59 a barrel, reversing a decline of more than 6 percent
during U.S. trade on Thursday.
Base metal prices also rallied with London Metal Exchange
copper, zinc and lead all up around 5 percent in Asian trade.
The dollar retreated against the euro and a basket of
currencies after most interbank lending rates fell on Thursday.
Steps by central banks to provide funds, improve bank
balance sheets and open up credit lines to cash-strapped
institutions have helped ease some of the concerns over a near
freeze in short-term lending. []
"The safety buying of the dollar may have peaked for now,"
said Hideki Amikura, deputy general manager of forex at Nomura
Trust Bank.
The euro was up 0.4 percent from late Thursday New York
trade at 1.3505. The dollar index <.DXY>, which measures the
dollar's value against a basket of six major currencies, rose
0.1 percent to $82.347.
(Editing by Lincoln Feast)
