Global Markets Upbeat Japan data cheers Nikkei, Asia - gold slumps

Global Markets Upbeat Japan data cheers Nikkei, Asia - gold slumps
Business & Markets 2013
Written by Surin Murugiah
Friday, 28 June 2013 14:18

SYDNEY (June 28): Asian shares rose for a third day on Friday led by a solid rally in Tokyo's Nikkei, which is on track to end the first half of the year up a barnstorming 31 percent.

Gold, however, plumbed fresh three-year lows, leaving investors battered and bruised after a near 30 percent drop this year. Analysts suspect the recent leg lower was due in part to forced liquidations of positions and quarter-end selling by funds.

MSCI's broadest index of Asia-Pacific shares outside Japan climbed 1.4 percent, pulling further away from an 11-month low and wiping out this week's losses. It was still down around 7 percent for the year.

European stocks were seen opening steady, in line with U.S. stock futures, which were a touch firmer.

The improved sentiment in Asian bourses followed Wall Street's rally as two more U.S. Federal Reserve officials sought to reassure markets that any tightening of its stimulus drive was still a distant prospect.

Japan's Nikkei average jumped 3.5 percent to its highest in nearly four weeks, egged on by upbeat data showing consumer prices stopped falling in May and labour demand reached its strongest level in five years.

"Investors are cheered by the better data and see that Abenomics is being effective for the economy," said Takuya Takahashi, an analyst at Daiwa Securities, referring to Prime Minister Shinzo Abe's expansionary policy.

Concerns about China's credit crunch continued to subside with the central bank pledging to ensure reasonable lending growth and stable markets.

Bank of America/Merrill Lynch analysts Ting Lu and Larry Hu said the worst of the liquidity squeeze is over and markets should calm down.

"No policymaker can afford to be blamed for being responsible for an unnecessary financial meltdown and growth hard landing," they wrote in a research note.

Mainland Chinese stocks rose on Friday.

The better mood in equity markets helped the euro push higher, although the Australian dollar missed the party with traders citing selling pressure from Japanese banks.

The euro rose 0.3 percent to $1.3070, continuing to pull away from a four-week trough around $1.2984. This saw the dollar ease 0.1 percent against a basket of major currencies .

The Australian dollar fell 0.2 percent to $0.9262, within easy reach of a 33-month trough around $0.9148 plumbed on Monday.

The slide in gold, a major export earner for Australia, was one factor keeping the Aussie under pressure.

Spot gold fell deeper below $1,200 to reach its lowest since August 2010. It was on track to record its worst quarter since at least 1968.

Other commodities fared better with U.S. crude futures climbing 0.4 percent to $97.49 a barrel, while copper dipped 0.4 percent to $6,727 a tonne.