* Stocks up sharply, helped by Citigroup results
* Overall, quarterly earnings are mixed
* UK's Blanchflower says Britain heading for recession
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text)
By Kevin Plumberg
HONG KONG, July 21 (Reuters) - Asian stocks rose sharply on
Monday, helped by a smaller-than-expected loss at Citigroup
that provided comfort about the financial sector's stability
ahead of more results this week from banks and industrial
companies.
Oil prices, having tumbled in the past week or so by more
than $17 from a record high above $147 a barrel, also supported
shares of exporters in the region.
Depending largely on how quarterly earnings look at
companies like Bank of America Corp <BAC.N>, Caterpillar Inc
<CAT.N> and Honda Motor Co <7267.T>, equity markets this week
could extend their rally or just as easily fall on their face.
"It is too premature to assume that the bull market is
coming back," said Albert Hung, chief investment officer at
Alleron Investment Management in Sydney.
"There are some concerns that the earnings growth forecast
for fiscal 2009 is still too high so there may be some earnings
revision downwards."
Markets in Japan were closed for a public holiday, thinning
liquidity in the region.
Hong Kong's Hang Seng <> rose 3 percent, with HSBC
<0005.HK> leading the way.
South Korea's benchmark KOSPI <> jumped 3.6 percent,
led by gains in the shares of index heavyweights Samsung
Electronics <005930.KS> and the world's fourth-largest steel
maker POSCO <005490.KS>.
LG Electronics Inc <066570.KS> shares surged 6 percent on
expectations the company's bottom line doubled. []
Australia's S&P/ASX 200 index <> climbed 3.2 percent,
lifted by banks such as National Australia Bank <NAB.AX> and
Commonwealth Bank of Australia Ltd <CBA.AX>.
The MSCI index of Asia-Pacific shares outside of Japan
<.MIAPJ0000PUS> was up 2.9 percent on the day but is down 22
percent so far this year.
Concerns about the global impact of a weak U.S. financial
sector have eased after Citigroup, the largest U.S. bank,
reported a second-quarter loss of $2.5 billion, which was
smaller than expected. []
However, the picture painted by higher-than-expected
results from JPMorgan <JPM.N>, Citigroup and IBM <IBM.N> was
tainted somewhat by lower-than-forecast results from technology
sector bellwethers such as Google Inc <GOOG.O> and Microsoft
Corp <MSFT.O>.
In addition, food and energy prices -- though well off
their peaks -- continue to fuel inflation at a time when the
global economy is slowing down.
Indeed, Bank of England policymaker David Blanchflower told
a UK newspaper the British economy is heading into recession
and the benchmark interest rate should fall "well below" the
current 5 percent. His comments weighed on sterling.
[]
The U.S. dollar, which rose broadly last week, slipped
against the euro and the yen on Monday ahead of the raft of
bank earnings this week that will provide the latest test for
sentiment on the financial sector.
"JPMorgan and Citi might have done OK, but this week brings
reports from WaMu and Wachovia, two institutions that have been
singed by the subprime debacle," said David Watt, a senior
currency strategist at RBC Dominion Securities.
"Given that few of the major currencies seem attractive to
investors at the present time, a sad-sack performance is
appropriate," he added, noting that the euro and sterling had
economic troubles of their own.
The euro rose 0.2 percent to $1.5862 <EUR=>, about two
cents below an all-time high touched last week. Against the
yen, the dollar was down 0.1 percent at 106.78 yen <JPY=>.
Crude prices edged up from late New York levels <CLc1> but
remained below $130 a barrel as talks between world powers and
nuclear ambitious Iran, the fourth largest oil exporter, proved
inconclusive.
Still, oil fell 11 percent last week, the most since
December 2004, on the view that consumer and industrial demand
is slowing.
(Additional reporting by Geraldine Chua in Sydney)
