Asia resource shares helped by oil bounce, dollar capped

By Shinichi Saoshiro

TOKYO (Reuters) - Asian equities were mixed on Tuesday, with a rebound in crude oil and other commodity prices favouring the stock markets of resource-exporting countries, while the likes of Tokyo's Nikkei struggled.

Crude oil held on to its gains after rebounding sharply overnight from five-year lows. The bounce in commodities was also a good omen for commodity currencies such as the Canadian and Australian dollars, and also helped gold to bounce back.

Buoyed by a relief rally in resource firms, Australian shares rose 1.3 percent. Similarly, Indonesian stocks gained 0.4 percent and Singaporean shares rose 0.9 percent.

"We're one of only a few markets in positive territory today and it really reflects that high presence of resources stocks," said CMC Markets chief market strategist Michael McCarthy, referring to the rise in Australian shares.Reflecting mixed fortunes within the region, MSCI's broadest index of Asia-Pacific shares outside Japan was up a modest 0.1 percent.

The region's decliners included Tokyo's Nikkei which shed 0.1 percent as the yen's losing streak came to a halt, and South Korea's Kospi, which lost 0.5 percent on global growth concerns.

Japanese equities and government bonds mostly shrugged off a downgrade of Japan's sovereign debt rating by Moody's on Monday.

The rating agency downgraded Japan by one notch to A1 from Aa3, citing rising uncertainty over the country's ability to hit its debt-reduction goal. The downgrade came just after Japanese premier Shinzo Abe opted to postpone an increase in sales tax intended to tackle Japan's debt burden.

"It can be said that the sales tax delay had gained the support of the international community as it was meant to help the economy amid a slowdown, and the downgrade is unlikely to change such views," said Masafumi Yamamoto, a market strategist at Praevidentia Strategy in Tokyo.

"As for Japanese government bonds (JGBs), which are more directly impacted by downgrades, any effect is likely to be temporary thanks to the Bank of Japan's quantitative easing. Past downgrades have also had little impact on JGBs," he said.

JGB 10-year futures were down 0.15 point at 146.75 but still within striking distance of a record high 146.96 hit on Monday.

The dollar was steady at 118.450 yen. In turbulent trade immediately after Moody's downgrade of Japan the greenback jumped to a seven-year high of 119.15 but its gains were pared as the rebound in oil prices lifted commodity currencies against the greenback.

The Canadian dollar rose to C$1.1327 per USD from a one-month low of C$1.1459 and the Aussie fetched $0.8483, pulling away from a 4-1/2 year low of $0.8417.

U.S. crude oil was down 0.7 percent at $68.50 a barrel, after posting a 4 percent rise overnight from a five-year low of $63.72 as bearish positions were squeezed.

Gold, beaten down after Switzerland on Sunday voted against a proposal to boost gold reserves, also held on to the bulk of its gains after rebounding sharply on spillover support from the bounce in oil. [GOL/]

Spot gold was down 0.4 percent at $1,205.00 an ounce after gaining 3.7 percent the previous day.

(Additional reporting by Byron Kaye in Sydney; Editing by Eric Meijer)