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Asian shares, euro steady after U.S. data

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Reuters TOKYO
Last Updated : Mar 27 2013 | 6:40 AM IST

By Chikako Mogi

TOKYO (Reuters) - Asian shares and the euro steadied on Wednesday as positive U.S. data pointed to a continuing moderate recovery in the economy, offsetting uncertainties from the Cyprus bank bailout scheme which inflicts severe losses on wealthier depositors.

Data on Tuesday showed demand for U.S.-made durable goods surged in February, suggesting factory activity continued to expand.

U.S. single-family home prices started the year with the biggest annual increase since June 2006, according to a separate report.

The Conference Board industry group, however, said consumer confidence tumbled in March as Americans turned more pessimistic about short-term economic prospects, but stock markets focused on the good news, taking the Dow Jones industrial average to a record closing high and the Standard & Poor's 500 Index to just below a record closing peak.

"An increase in durable goods shipments raised our tracking estimate for Q1 GDP by one-tenth to 2.6 percent, while strength in underlying orders points to further gains in shipments in coming months," Barclays Capital said in a research.

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The MSCI's broadest index of Asia-Pacific shares outside Japan was steady, underpinned by a 0.2 percent rise in Australian shares on the back of gains in blue chip miners and financials on strong resource prices.

South Korean shares opened up 0.4 percent.

"The local index is expected to extend gains from the last two sessions as positive U.S. data fuels optimism," said Lee Seon-yeop, an analyst at Shinhan Investment Corp, of Seoul shares.

Japan's Nikkei stock average opened nearly flat.

The Cyprus rescue scheme averted an imminent banking collapse but the measure requiring bank bondholders and large depositors to take heavy losses raised concerns, notably the risk of this model being used in the future and spurring a run on banks in other euro zone countries with much larger banking systems than Cyprus's.

The island state is expected to complete capital control measures on Wednesday to prevent a run on the banks by depositors anxious about their savings after the country agreed a painful rescue package with international lenders.

The euro steadied at $1.2858, hovering near a four-month low of $1.2828 touched on Tuesday, and capped by its 200-day moving average of around $1.2880. The euro closed below the key technical level on Monday for the first time since November.

Revived pressure on the euro kept the dollar index, measured against a basket of major currencies, not far from a 7-1/2-month peak of 83.166 set earlier this month.

Against the yen, the dollar was up 0.2 percent to 94.60.

U.S. crude futures eased 0.2 percent to $96.16 a barrel.

Spot gold was up 0.1 percent around $1,600 an ounce, barely holding above its 14-day moving average.

(Additional reporting by Joyce Lee in Seoul; Editing by Eric Meijer)

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First Published: Mar 27 2013 | 6:28 AM IST

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