By Tom Miles
HONG KONG, Feb 11 (Reuters) - Oil and precious metals rose
on supply concerns on Monday in thin holiday trade in Asia,
while the few stock markets that were open, such as South Korea
and Australia, unravelled on fear the credit crunch would
spread further.
The price of wheat <WH8> jumped to a fresh record high as
investors piled into commodities they think will withstand a
global economic slowdown.
Platinum <XPT=> hit another record high at $1,887 an ounce
and sister metal palladium raced to a six month high after
power shortages disrupted mining in major producer South
Africa.
With Japan, China and Taiwan closed for national holidays,
Seoul and Australia set the tone, with the Korea Composite
Stock Price Index <> falling more than 3 percent by 0202
GMT.
"The KOSPI is actually doing better when compared to the
other markets' losses during the holiday," said Kim Seong-joo,
an analyst at Daewoo Securities. "The losses could have been
steeper."
Indian shares seesawed in opening trade but managed to
notch up a 0.4 percent gain.
The Dow Jones industrial average <> closed down 64.87
points, or 0.53 percent, at 12,182.13 on Friday, a fall of 4.4
percent over the week.
MSCI's measure of Asia Pacific stocks excluding Japan
<.MIAPJ0000PUS> was down 1.4 percent by 0225 GMT.
"The slowing U.S. economy will hit emerging economies that
rely heavily on exports and higher credit market risks also
mean you should sell," Kim said.
AUSTRALIA DOWN
Australia's benchmark S&P/ASX 200 index <> was also
down by more than 2 percent by 0204 GMT, as investors sold
banking stocks after the Reserve Bank of Australia raised
inflation forecasts increasing chances of more interest rate
increases.
Australia's central raised its inflation forecast to well
above its comfort zone, underlining the risk of more interest
rates increases [].
"It certainly highlights the fact they're thinking
seriously about going again in March," said Rory Robertson,
interest rate strategist at Macquarie Bank. "Back to back hikes
are unusual when rates are already at decade highs. But the RBA
is more worried about inflation than it has been in a decade,
and it seems determined to nip the problem in the bud."
National Australia Bank Ltd <NAB.AX>, the nation's top
lender by assets, lost 3.2 percent to A$32.36 and Commonwealth
Bank of Australia Ltd <CBA.AX>, the second-biggest lender, fell
3.4 percent to A$48.46. [].
PLATINUM HIGH
International investors are vigilant for further signs of a
possible recession in the U.S. economy and a U.S. slowdown that
could dent profits for Asia's exporters and weaken the dollar.
The dollar held steady after a weekend Group of Seven
meeting acknowledged growing risks to the global economy and
kept comments on currencies almost unchanged from the October
statement.
The euro <EUR=> inched up against the dollar and the yen
<JPY=> after European Central Bank President Jean-Claude
Trichet warned the market not to bet on a cut in interest rates
because of persistent inflation pressures in the euro zone.
"While there was no specific language change that could
offer a major catalyst to FX markets, the overall tone from the
G7 should continue to reinforce the cautious stance of
investors," said currency analysts at Morgan Stanley in a
research note.
Dollar-denominated commodities tend to make nominal price
gains as the currency weakens but they have also risen on
strong Asian demand and supply constraints.
Platinum <XPT=> hit another record high on Monday on the
back of lingering supply concerns in South Africa, which
produces four-fifths of the world's metal, while gold <XAU=>
firmed near the record $936.50 an ounce it hit in early
February.
Oil prices firmed in early Asian trade after soaring 4
percent on Friday, their biggest gain in nearly two months as
production problems in the North Sea and Nigeria pushed aside
fears that a U.S. recession would hurt fuel demand in the
world's top consumer.
Venezuelan President Hugo Chavez on Sunday threatened to
stop sending oil to the United States on Sunday after Exxon
Mobil <XOM.N> froze $12 billion of Venezuela's overseas oil
assets as it pushes for compensation for a nationalised oil
project.
"If you freeze us, if you really manage to freeze us, if
you damage us, then we will hurt you. Do you know how? We are
not going to send oil to the United States, Mr. Bush, Mr.
Danger," Chavez said on his weekly TV show. []
(Additional reporting by Rhee So-eui in SEOUL, Fayen Wong and
Denny Thomas in SYDNEY, editing by Louise Heavens)
