* MSCI Asia ex-Japan index up 9th day in last 10
* Japan's Nikkei index posts longest winning run in 21
years
* Investors snap up scorching China IPOs
* Oil nears $69
* U.S. Treasury yields steady ahead of big week of supply
By Kevin Plumberg
HONG KONG, July 27 (Reuters) - Asian stocks rose for the
ninth day in 10 on Monday, with investors still focused on
upward momentum in corporate earnings, though some worried
whether the gains were racing ahead of longer-term economic
prospects.
Japan's Nikkei share average posted its longest winning
streak in 21 years, and South Korea's KOSPI since April 2006.
Oil prices also climbed, rising to the highest since early
July, as investors took cues from equity markets.
Major European stock futures <STXEc1> were up 1.9 percent
on hopes for an earnings recovery, while U.S. equity futures
<SPc1> rose 0.2 percent <SPc1>.
In addition to a steady flow of companies reporting results
this week, including Exxon Mobil Corp <XOM.N>, Honda Motor Co
<7267.T> and Mitsubishi UFJ Financial Group <8306.T>, investors
will also look out for U.S. gross domestic product data for the
second quarter due on Friday, hoping for some indication that a
second-half recovery is on track.
Japan's Nikkei share average <> closed 1.45 percent
higher, hitting a nine-month high. The index was up for a ninth
straight session, the longest rising streak since 1988.
"Hopes for corporate earnings are helping shares extend the
rally, while short-covering in stock futures is also giving
them a lift," said Shinji Igarashi, equity manager of the sales
department at Chuo Securities in Japan.
The MSCI index of Asia Pacific stocks outside Japan
<.MIAPJ0000PUS> rose 1.6 percent to the highest in 10 months,
with strength evenly spread out across consumer sectors,
financials, materials and technology.
The index was at the highest since late September, having
risen 68 percent since March 9, when investors began to move
back to equities from cash after a period of intense volatility
spurred by the global financial crisis.
Hong Kong's Hang Seng index <> was up 1.3 percent, with
financial firms and property developers remaining darlings of
the market. Shanghai stocks <> rose 1.8 percent.
Judging by the appetite for newly listed shares in China,
the stock market rally in Asia was not about to peter out soon.
Some markets were even showing signs of running too hot.
HOT HOT HOT
Shares of Sichuan Expressway <601107.SS> debuted on the
Shanghai Stock Exchange on Monday and more than quadrupled in
price, blowing away analysts' expectations. []
China State Construction Corp, the world's largest IPO this
year will list on Wednesday, the official Shanghai Securities
News said on Monday.
"That's really too much speculation, apparently propelled
by excessive liquidity in the system," said Huatai Securities
analyst Zhou Lin in Nanjing. []
"Strong corporate listing prices will boost an
'easy-profit' mentality and bode well for future IPOs, but high
prices for newcomers on the debut trading day and an expected
fall as they return to normal valuations in coming weeks will
hurt the market."
As of last week, about 3-in-4 of the 184 companies in the
S&P 500 index had reported quarterly results above
expectations, largely due to earnings in the financial sector,
Thomson Reuters data showed.
Oil prices looked set to flirt with the psychologically
important $70 a barrel level after having spent almost all of
July trading below it.
The seemingly unquenchable appetite for global equities
along with U.S. dollar weakness in the last few weeks has
improved sentiment on crude, though some analysts wondered how
long oil's support would last.
"Oil's rally has again been supported by external factors,
such as positive macroeconomic data and rally in the equities
markets, and those factors, along with the U.S. dollar, should
again set the tone for oil this week," said Toby Hassall, a
commodities analyst at Commodities Warrants Australia.
"But considering how actual demand in the U.S is still
quite weak, I think there is a downside risk for oil prices."
U.S. oil for September delivery rose 1 percent to $68.75 a
barrel <CLc1>, while Brent <LCOc1> was up 1.1 percent to
$71.07.
The ICE Futures U.S. dollar index <.DXY> lost ground as
stocks in Asia started to take off on Monday. It fell 0.2
percent, closing in on a one-month intraday low reached last
Thursday.
Though equity markets reflected few concerns among
investors about diving further into riskier assets, which
usually would weigh on the safe-haven dollar, positioning may
be a factor preventing further short-term weakness in the U.S.
currency.
Traders on the International Monetary Market doubled the
value of their net short term position to $16.6 billion in the
week to July 21. []
Such a quick buildup in bets against the dollar may mean
the market is vulnerable to bouts of profit taking.
U.S. Treasury yields ticked higher as stocks rose. The
benchmark yield on the 10-year note was at 3.69 percent
<US10YT=RR>, having bounced 37 basis points in the last two
weeks as the global equity rally accelerated.
The market is expecting a record $115 billion in new supply
this week.
Fear over the expected $2 trillion in supply this year
pushed up benchmark Treasury yields from historic lows in March
when the Federal Reserve announced its $300 billion Treasury
purchase program aimed at lowering interest rates and restoring
growth.
Emerging market central banks and investors, so far, have
basically mopped up the new supply, keeping yields contained.
(Additional reporting by Rika Otsuka in TOKYO and Fayen Wong
in PERTH)
(Editing by Kim Coghill)
