Asian shares head for 4th day of falls, China reform agenda in focus
2013/11/12TOKYO (Reuters) - Asian shares slipped on Tuesday, on track for a fourth straight day of losses, with investors turning their attention to the Chinese Communist Party policy meeting for clues to its economic agenda for the next decade.
The dollar rallied against the yen for a third straight day after a surprise rise in U.S. October jobs growth on Friday, which has raised the prospect of the Federal Reserve reducing its stimulus drive sooner than thought. The dollar also kept pressure on emerging Asian currencies.
MSCI's broadest index of Asia-Pacific shares outside Japan <.MIAPJ0000PUS> dipped 0.1 percent. It was heading for an eighth day of decline out of nine sessions.
Hong Kong's bourse (.HSI) dropped 0.8 percent in light trade, weighed by the banking sector after data showed China's new bank lending hit a 10-month low last month, adding to evidence the central bank may be tightening its monetary stance.
But Tokyo's Nikkei share average (NIK:^9452), helped by the softer yen, climbed 1.7 percent after touching a three-week high, while Seoul shares (.KS11) gained 1 percent.
"The recent decline opened up room for bargain-hunting, but thin trading volume underscores investors' search for clues on the timeline for the Fed's stimulus cutback," said Lim Dong-rak, an analyst at Hanyang Securities in Seoul.
Overnight, U.S. stocks edged up, lifting the Dow Jones industrial average (.DJI) to another record closing high in light volume on Veterans Day. (.N) U.S. S&P 500 E-mini futures were flat in Asian trade on Tuesday.
All eyes will be on the unveiling of China's economic blueprint for the next decade after a four-day closed-door meeting ends on Tuesday.
Beijing seeks to balance the need to overhaul the world's second-largest economy while it tries to preserve stability and to reinforce the Communist Party's power.
"In terms of the effect on the market, some people actually believe it might be slightly negative and the reason for that is ... you have a situation where the current investment in Chinese infrastructure slows down as these laws are changed," said Evan Lucas, market strategist at IG in Melbourne.
But on a medium-term view, changes to the Chinese economy would boost growth in the region, he said.
DOLLAR IN BUOYANT MOOD
The dollar was up 0.4 percent at 99.53 yen, edging close to the 100-mark, a level not seen since September 11.
The greenback rose 0.3 percent to $0.9333 to the Australian dollar after a measure of Australian business confidence pulled back from 3-1/2 year highs in October as sales and profits stayed subdued.
The euro dipped 0.1 percent to $1.3393 after bouncing 0.3 percent on Monday, ending a two-day streak of losses that saw the single currency briefly touch an eight-week low last Thursday on the back of a surprise rate cut by the European Central Bank.
The outlook for the dollar remained upbeat with expectations building that the Fed might soon taper its $85 billion-a-month bond-buying program after U.S. employers added more than 200,000 new jobs last month -- many more than forecast by analysts.
Emerging currencies remained on the defensive, reflecting concerns about capital outflow when the Fed scraps its cheap money policy.
The rupiah was down 0.3 percent to a six-week low at 11,590 per dollar, adding to Monday's 1.3 percent slide, while the Philippine peso eased 0.2 percent to 43.66 to a dollar, a near two-month low.
Indonesia's central bank is likely to keep its benchmark reference rate on hold at its monthly meeting on Tuesday, with inflation stabilized and the current-account deficit expected to narrow -- relieving pressure on the ailing rupiah.
UBS had a small underweight recommendation on emerging markets in its global equity portfolio model, though it was overweight on the euro zone. It was neutral on U.S. and Japanese stocks.
In the commodities markets, U.S. crude prices slipped 0.3 percent to below $94.90 a barrel, giving up some of the 0.6 percent rise on Monday after Iran and six world powers failed to reach a deal on Tehran's nuclear program and after Chinese data pointed to a rise in fuel demand. (O/R)
Gold dipped 0.2 percent to below $1,280 an ounce, hovering near a three-week low touched overnight.
