* Banks, steelmakers lead gains in Asian shares
* Crude oil hovers close to three-month low
* Dollar holds near 1-month high, JGB yields near 3-month
low
(Repeats to more subscribers)
By Tom Miles
HONG KONG, July 30 (Reuters) - Global stocks rose on
Wednesday as investors wagered that the worst news from U.S.
banks might be over and took heart from a strengthening dollar
and falling oil prices.
Regional share markets reversed Tuesday's falls after
reassessing Merrill Lynch's <MER.N> $5.7 billion write-down and
share sale as a signal of a turning point in the credit crisis.
Financial bookmakers expected major European markets to
rise as well, with London's FTSE 100 <> seen opening up as
much as 1 percent, the German DAX <> as much as 0.8
percent and the French CAC 40 <> as much as 0.9 percent.
Among Europe's likely gainers was top global steelmaker
ArcelorMittal <ISPA.AS> <MTP.PA>, which unveiled a
second-quarter net profit of $5.84 billion, smashing the
consensus forecast.
Despite ballooning prices for iron ore and coal, Arcelor's
huge profit, following a similar surprise at U.S. Steel <X.N>
on Tuesday, shows steelmakers have passed price rises on to
consumers, regardless of slowing economic growth. Arcelor's
results helped boost shares in Asian competitors Tata Steel
<TISC.BO> and POSCO <005490.KS> more than 5 percent.
Japan's Nikkei average <> closed up 1.6 percent, led
by Matsushita Electric Industrial Co <6752.T>, which gained 5.5
percent on the back of strong earnings.
Stocks elsewhere in Asia, gauged by MSCI's index, rose 1.5
percent <.MIAPJ0000PUS> by 0650 GMT, with a strong showing from
Australia's benchmark S&P/ASX 200 index <>, which rose 1.8
percent as bank stocks rebounded from this weeks sharp falls.
Hong Kong's Hang Seng <> rose more than 2 percent,
helped by Chinese oil refining giant Sinopec <0386.HK>, which
gained almost 6 percent after a Reuters report that it had
received a $4.4 billion subsidy to offset a first-half refining
loss.
The high price of oil has spurred inflation, troubled oil
refiners and savaged airlines around the world this year, so a
$25 slump in crude prices over the last two weeks towards
three-month lows has brought some respite to equities.
U.S. crude oil <CLc1> hovered around $122 a barrel on
Wednesday, reflecting mounting evidence that high prices and a
souring U.S. economy were cutting into energy demand. Buyers
struggled to put a floor under their steepest slide in a year
and a half.
"The reason prices are coming off is that there are
expectations for inventory builds... on reduced demand," said
Robert Nunan, a risk management executive at Tokyo-based
Mitsubishi Corp.
The weakening oil price has been bolstered by the dollar,
which was steady near Tuesday's one-month high of about 108.30
yen <JPY=>, with an unexpected rise in U.S. consumer confidence
offsetting a steeper-than feared fall in Japanese industrial
output.
The U.S. dollar index <.DXY>, which measures the dollar's
performance against a basket of six currencies, firmed up to
73.360, nearing its highest level in about a month.
The U.S. currency could extend gains if more economic data
this week further assuage market concerns about the economy
falling into a recession, traders say.
Investors will closely watch the ADP national employment
survey due later in the day to help reassess forecasts for key
U.S. jobs numbers due out on Friday.
"The market has been altering excessively pessimistic views
about the U.S. economy," said Hideaki Inoue, chief manager of
forex trading at Mitsubishi UFJ Trust Bank.
"Key data this week such as the second quarter growth data
and the jobs report later in the week could encourage some
investors to shift funds back into the dollar, though it
depends on the outcome," said Inoue.
Trade in Japanese government bonds was subdued as attention
turned to the U.S. data.
The 10-year yield slipped to 1.525 percent, touching
Tuesday's three-month low, with some investors looking to buy
bonds before another anticipated fall in yields. But traders
said others were biding their time in case positive stock
market sentiment pushes yields up.
(Additional reporting by Geraldine Chua in SYDNEY, Satomi
Noguchi, Chikako Mogi, Aiko Hayashi and James Topham in TOKYO,
Editing by Dhara Ranasinghe)
