By Nina Mehra
HONG KONG, Jan 8 (Reuters) - Most Asian shares edged up on
Tuesday as oil prices recovered from steep falls the prior day,
but Japan's Nikkei earlier hit an 18-month low as investor
worries about a recession in the United States persisted.
The dollar steadied from last week's decline, while gold
saw modest gains. Japanese bond futures also inched up to a
one-month high, on expectations of further interest rate cuts
by the Federal Reserve, but gains were limited ahead of an
auction of 10-year JGBs on Wednesday.
"The biggest concern in the market now is the possibility
of a recession in the U.S.," said Tony Nunam, a manager at
Mitsubishi Corp's risk management unit.
"Right now, there seems to be a 50-50 chance that it would
happen and even if it doesn't, the fear that it might is enough
to spook the market."
European stocks were forecast to rise on Tuesday according
to financial bookmakers, with Britan's FTSE 100 <> seen
15-16 points higher and Germany's DAX <> gaining 13-21
points.
In Asia, MSCI's measure of Asia Pacific stocks excluding
Japan <.MIAPJ0000PUS> rose 0.4 percent by 0621 GMT after
hitting a two-week low in the previous session.
The index has dropped 3 percent this year, weighed down by
data that raised investor fears of a U.S. recession, including
a weak employment report out last Friday.
But some analysts played down the wider impact of a U.S.
slowdown, pointing to strong growth elsewhere, especially Asia.
"When you look around the world, even if the U.S. slows,
there's a lot of people who can pick up the baton," said
Michael Heffernan, Austock Stockbroking senior client adviser.
The Hang Seng <> rose 1 percent, benefitting from
strong gains for Hong Kong property developers, amid
expectations that U.S. rate cuts could boost demand for real
estate shares. Hong Kong's rate cycle tends to track the U.S.
because its currency is pegged to the U.S. dollar.
Tokyo shares <> crept up 0.2 percent -- after earlier
hitting an 18-month low.
Shares in Japanese electronics giant Sony <6758.T> surged
3.4 percent on expectations for its Blu-ray high definition DVD
format and a positive market response to good holiday sales.
But South Korea <> ended 0.3 percent lower, although
one bright spot was Hyundai Motor <005380.KS>, up 0.9 percent
on expectations for its new premium car model and the won's
<KRW=> recent fall against the dollar.
Chip-related stocks extended recent falls following sector
downgrades by som U.S. brokers last week. Tokyo Electron
<8035.T> was down 1.4 percent while Kyocera <6971.T> slipped
1.5 percent.
Australia's benchmark S&P/ASX 200 index <.AXJ0> eased 0.5
percent, dragged lower by big mining stocks such as BHP
Billiton <BHP.AX> on worries about slowing global demand.
OIL EDGES UP
The price of oil -- which hit a record above $100 a barrel
last week -- edged higher in Asian trade after ending down
almost $3 overnight on U.S economy concerns and unseasonably
warm weather there. U.S crude futures <CLc1> were quoted at
$95.63 while Brent Crude was at $95.02.
Prices of commodities from energy to grains and metals have
come under pressure as investors take profits on last week's
record highs. But some analysts said the downside was limited
by low crude inventories in the United States.
The dollar held steady against the yen at 109.25 yen
<JPY=>, getting some respite after hitting a six-week low last
week, with some traders viewing the currency as oversold.
Traders also trimmed bets against the dollar on speculation
that U.S. inflation may prevent aggressive interest rate cuts.
Spot gold <XAU=> posted modest gains at $ 0.70/861.50 an
ounce, as oil prices recovered and analysts forecast a
long-term bullish trend.
