Business Standard

Asian shares ease; dollar index off three-year high

Investors remain jittery about the potential for the tapering of asset purchases ahead of Bernanke's testimony to Congress

Reuters Singapore
The dollar nursed losses versus a basket of currencies on Tuesday, having retreated the previous day as traders pared back expectations that US Federal Reserve Chairman Ben Bernanke would hint at tapering bond buying this week.

The market's focus is shifting to Bernanke's testimony to Congress on Wednesday after recent comments by Fed officials fuelled speculation the US central bank may trim its bond purchases sooner than expected.

"Markets remain jittery about the potential for the tapering of asset purchases ahead of Chairman Bernanke's testimony to Congress," analysts at Barclays said in a research note.

The dollar index, which measures the greenback's value against a basket of currencies, edged up 0.2% to 83.939. It dropped 0.6% on Monday, retreating from Friday's high of 84.371, its strongest level since July 2010.

 

Asian shares were mixed in early trading. South Korean equities edged up 0.2% after global markets mostly rose on Monday, but Japan's Nikkei index eased 0.1% due to a pause in the yen's weakness.

"Profit-taking will be dominant in the Tokyo market today. But the downside will be supported because there are many investors who didn't purchase stocks in the sharp rally who will come into the market," said Takashi Hiroki, chief strategist at Monex Inc.

Against the yen, the dollar edged up 0.3% to 102.53 yen but remained below a 4-1/2-year high of 103.32 yen set on Friday.

MSCI's broadest index of Asia-Pacific shares outside Japan eased 0.1% to 483.08.

Global equity markets had mostly pushed higher on Monday, driven up by a flurry of merger and acquisition activity, with MSCI's all-country world equity index touching its highest level since June 2008.

US stocks ended little changed on Monday, but both the US benchmark S&P 500 index and the Dow briefly hit all-time intraday highs.

Gold eased 0.4% to $1,388.56, steadying after gaining nearly 3% on Monday.

Brent crude held steady at $104.81 a barrel.

Don't miss the most important news and views of the day. Get them on our Telegram channel

First Published: May 21 2013 | 6:59 AM IST

Explore News