By Tom Miles
HONG KONG, April 24 (Reuters) - Asian shares got a lift on
Thursday after a stamp duty cut to slash dealing costs gave the
flagging Shanghai index a boost, while a modest dollar rebound
supported exporters and kept oil prices from bubbling over.
But investors, still anxious about rising inflation in
Asia, were daunted by the soaring price of rice, which hit a
record high.
Asian equity markets made a cautious and slightly negative
start to the day until the Shanghai Composite Index <>
opened up 8 percent on the strength of a cut in stamp tax, to
0.1 percent from 0.3 percent.
The Shanghai market has fallen by 51 percent from its
October peak, dragged down by high inflation, the possibility
of an economic slowdown this year and heavy supplies of fresh
equity, and analysts said the tax change could fuel a 20
percent bounce.
Shanghai's surge, which drove some stocks such as China
Life Insurance <601628.SS> to their 10 percent daily limits,
injected some optimism into Japan's Nikkei average <>,
which was up 0.4 percent by 0200 GMT.
Tokyo traders were cautious as the company earnings season
got into full swing, with steelmaker JFE Holdings Inc <5411.T>
and Nintendo Co Ltd <7974.OS> among major firms due to announce
results later in the day.
"The market trend has been upward, but investors cannot yet
commit fully to buying," said Kenichi Hirano, operating officer
at Tachibana Securities. "There are also earnings ahead. Today
and tomorrow will be the first peaks of the season.
As the stock market's initial gloom lifted, the appetite
for Japanese government bonds waned. The yield on two-year
notes <JP2YTN=JBTC>, already lacking buyers ahead of an auction
of the same maturity, hit a four month high of 0.700 percent.
Shares across the rest of Asia <.MIAPJ0000PUS> were up 0.6
percent, with Sydney's benchmark S&P/ASX 200 index <> off
by 0.9 percent, backtracking after a two-month closing high in
the previous session, when a rare spell of banking optimism
drove the index up 1.6 percent.
"The banks are cheap and offer good dividend. However,
there are still a number of problems that are coming up from
the credit crunch that we may have not seen yet," said Adnan
Kucukalic, equity strategist at Credit Suisse First Boston.
"Until all that uncertainty has cleared up, we can't really
see a sustained outperformance for the banks."
Stocks also gained from the dollar's continued resilience,
with the euro <EUR=> under pressure ahead of German corporate
sentiment data, which may give further clues on the health of
the economy in the euro zone.
The euro, which this week hit $1.60 for the first time,
slid to $1.585, depressed by soft economic data and comments
from European policymakers indicating that the weaker U.S.
currency was hurting euro zone economic growth.
"The euro is taking a breather after its sharp rise against
the dollar this week, and it may see a little more correction
if today's German data is weak," said Kengo Suzuki, a currency
strategist at Shinko Securities.
The dollar also rose against the yen <JPY=> to 103.5 yen.
WILD RICE
The dollar's weakness has helped drive dollar-based
commodity prices in the last year, and U.S. crude oil <CLc1>
slipped 50 cents to $117.80 a barrel in Asian trade.
The latest commodity to race to a record was rice, the
world's second biggest food grain crop, which has hit
successive new peaks due to worries about supply shortages that
have led to political unrest and export restrictions.
Chicago Board of Trade July rough rice futures <RRN8>
surged to a record high of $25.010 per hundredweight in early
Asian trade.
In the latest development, Brazil temporarily suspended
rice exports on Wednesday to safeguard domestic supplies and
keep prices of the basic foodstuff stable.
The Latin American country, which is not a major global
supplier, follows in the steps of top exporters such as India
and Vietnam in imposing export curbs. []
Spot CBOT rice prices are up about 80 percent so far this
year. In the latest sign that fears of a rice shortage are
rippling around the world, Wal-Mart Stores Inc's <WMT.N> Sam's
Club warehouse said on Wednesday it was limiting sales of
several types of rice.
(Additional reporting by Chikafumi Hodo and Satomi Noguchi in
TOKYO; Editing by Louise Heavens)
