ASIA-Shares may consolidate as global markets pause

by **hlk** Wed 06 Jul 2011, 07:54

WELLINGTON: Asian stocks may trade sideways on Wednesday, as global stocks paused after recent gains while commodity prices rallied strongly on a 2 percent gain in oil prices, as new euro zone debt woes emerged.

The main Wall Street indices ended the first session after the long weekend barely changed on light turnover, pausing for breath after the best week for equities in two years.

Only the tech-heavy Nasdaq closed in positive territory, lifted by Netflix Inc hitting a record high after announcing plans to expand its online video service to 43 countries.

The market was seen largely ignoring data showing a rise in new orders in U.S. factories and the downgrading of Portugal's debt rating to junk status by Moody's.

Oil prices rallied on the back of a Barclay's forecast of higher prices in 2012, but gains were pared late in the session by the Portuguese downgrade.

Asian stocks listed on Wall Street were 0.04 percent lower while world stocks, as measured by the MSCI world equity index , fell 0.18 percent, and the Thomson Reuters global stock index was down 0.08 percent.

Both British and European shares were 0.1 percent higher on higher commodity prices and rumours of takeover action brewing.

The euro broke its six-day winning streak by slipping back against the U.S. dollar on the Portuguese downgrade, while weak euro zone data and media reports of further policy tightening ii China this weekend also weighed.

Japanese markets are expecting a positive open, which touched a two-month closing high on Tuesday, with Nikkei futures traded in Chicago 55 points above the last closing level in Osaka.

However, analysts suggest the Nikkei benchmark may struggle to break through resistance at 10,017.47, because of signs of short-term overheating with about 90 percent of shares are trading above their 25-day moving average.

Australian stocks are set to open flat, with share price index futures up 0.2 percent virtually unchanged from the close of the underlying S&P/ASX 200 index. – Reuters