* Modest gains for Asian stocks after strong US factory data
* Brent crude steadies after topping $100 on Egypt concerns
* Inflationary pressures build in China, South Korea
By Ron Popeski
SINGAPORE, Feb 1 (Reuters) - Asian stocks posted modest
gains on Tuesday, led by shares in resource companies, as strong
U.S. factory data and surging commodities prices offset fears
that unrest in Egypt could spread elsewhere in the Middle East.
Brent crude oil futures steadied after topping $100
a barrel overnight for the first time since 2008, adding to
concerns of a global fuel price spike even as policymakers in
many emerging economies struggle to contain soaring food prices.
Data released in China showed manufacturing input prices
were rising quickly, keeping pressure on the government to
tackle inflation.
Figures from South Korea showed consumer inflation in
January rose more than expected at the upper end of the central
bank's target. Inflation in Indonesia was also higher than
targeted, triggering pressure for rate rises, while in Thailand
the rate dipped from December but the outlook for further policy
rate rises remained unchanged.
The euro inched back up near a two-month high after a
jump in euro zone inflation fuelled expectations of an interest
rate increase and as worries about Egyptian unrest abated
slightly. The common currency stood at $1.3720.
Analysts said the euro could rise further, especially if
European Central Bank President Jean-Claude Trichet talks tough
on inflation after a Thursday policy meeting.
Japan's Nikkei share index and the MSCI index of
Asian shares outside of Japan rose 0.16 percent
and 0.23 percent respectively, with shares of energy and
resource companies outperforming.
Relief that turmoil in Egypt was not escalating helped
provide a floor for the market.
"Investors are finally able to focus on corporate earnings
and some stocks are set to benefit from expectations for their
results and forecasts," said Masumi Yamamoto of Daiwa Securities
Capital Markets.
Sentiment was supported by U.S. data showing factory
activity in the Midwest hit a 22-1/2 year high in January as
orders surged and employment prospects brightened, providing
further signs that the economy would stay on a solid growth path
this year.
Strong earnings reports and boosted mergers and acquisitions
activity also prompted investors to take a more sanguine view of
events in Egypt and renew purchases of riskier assets.
The Dow Jones industrial average closed up 0.68
percent overnight, while the Standard & Poor's 500 Index
gained 0.87 percent.
Brent crude hovered just above $100 after soaring as high as
$101.73 overnight, while U.S. crude futures steadied above $92.
Saudi Arabia said OPEC was concerned by unrest in Egypt,
where protesters seeking the removal of President Hosni Mubarak
planned a "million-strong" march on Monday, but saw no need for
an immediate boost in output as there was no oil shortage.
For more stories on the crisis in Egypt, see
London copper rallied to a record $9,832 on Tuesday and tin
also rose to an unprecedented $30,400 a tonne and shanghai
copper hits its highest in nearly four years.
Stock markets in Shanghai and Hong Kong were
little changed with investors reluctant to stake out fresh
positions ahead of long Lunar New Year holidays later this week.
China's official purchasing managers' index fell in January
to its lowest level in five months. Though activity continued to
expand, input prices rose quickly, keeping pressure on Beijing
to tighten policy to contain inflationary pressures.
"This indicates that the economic recovery trend is not yet
clear, and we may see economic growth slow down a bit," Zhang
Liqun, a government researcher, said in a statement accompanying
the release.
The data signalled that demand for oil may not rise as
quickly in China, the world's second largest oil user.
In Korea, the finance ministry said consumer inflation was
expected to hover at the 4 percent range in the current quarter
before softening to 3 percent in the second half. The index rose
4.1 percent in January, above a 3.9 percent forecast in a
Reuters poll.
Indonesia's annual inflation picked up in January to a
21-month high of 7.02 percent, above the central bank's end-2011
target range of 4-6 percent. Some economists brought forward
their expectations for a central bank rate hike to this Friday.
Annual core inflation in Thailand slipped to 1.3 percent
from 1.4 percent in December, while headline inflation was stuck
at around 3.0 percent. Economists said food price inflation was
less marked than in other countries, but authorities had to keep
close watch on rises in oil and raw materials.
(Editing by Daniel Magnowski)
