* Central banks' liquidity move helps supports stocks
* Oil steadies after prior session sharp rebound
* Investors still cautious about credit woes and inflation
(Repeats to more subscribers)
By Tom Miles and Rafael Nam
HONG KONG, July 31 (Reuters) - Most Asian stock markets
rose on Thursday after a move by central banks to boost
liquidity in financial markets offset a $4 rebound in oil
prices, while a surprisingly strong U.S. jobs indicator kept
the dollar well bid.
Regional bonds fell as investors ventured out of low-risk
holdings in search of higher returns, though they are likely to
remain cautious for the time being, analysts said.
Eruopean shares looked set to open slighly higher, with the
focus on a raft of corporate earnings, including from Deutsche
Bank <DBGnDE>, which announced on Thursday a further $3.6
billion of writedowns in the second quarter. []
Global markets are still facing risks on a variety of
fronts, including more potential credit woes, and concerns over
how central banks will handle rising inflation at a time of
slowing economic growth.
"In the short term, markets could continue to see a bit of
a rally but I still think that we probably haven't seen the low
in equity markets," said Simon Doyle, head of fixed income and
multi-asset at Schroder Investment Management in Australia.
"We're still working through the extent of the economic
downturn. There is a protracted period of weakness to come and
that's going to keep a very cautious tone in markets."
The U.S., European, and Swiss central banks extended on
Wednesday emergency lending facilities for investment banks and
expanded other liquidity programmes to ease credit market
strains that have weighed on the global economy for a year.
The joint measures helped lift share prices in the United
States and Europe on Wednesday, and were a factor in pushing up
U.S. bond yields and the U.S. dollar.
Most Asian stocks followed suit on Thursday, with the
MSCI's measure of Asia Pacific stocks excluding Japan
<.MIAPJ0000PUS> up 0.5 percent as of 0645 GMT.
South Korea's KOSPI <> index ended up 1.1 percent,
while markets in Australia <>, Singapore <.FTSTI> and Hong
Kong <> were up less than 1 percent each.
Tokyo's Nikkei average <> edged up 0.1 percent, as
defensive stocks such as drug makers offset worries about a
slowing global economy that hit exporter shares.
But other markets fell, including Shanghai <> and
Taiwan <>, as concerns over slowing corporate earnings
dominated trading.
OIL SCARE AGAIN?
Asian stocks also benefitted after an indicator of private
U.S. employment unexpectedly showed 9,000 jobs were added in
July, setting up some hopes the broader U.S. employment data
due out on Friday would provide a positive surprise as well.
[]
The dollar held near one-month highs against the euro
<EUR=> and the yen <JPY=> from the dose of optimism on the U.S.
economy, though gains in the currency were kept in check as oil
prices snapped a losing streak.
Oil prices <CLc1> steadied during Asia trade on Thursday at
$126.74 a barrel after rebounding more than $4 on Wednesday as
an unexpected drop in gasoline stocks led to concerns over
supply.
Some analysts predict oil prices will again touch record
levels, after pulling back sharply this month from a record
above $147 on July 11, as strong growth from emerging economies
such as China has stretched poor supply growth over the past
six years.
"Although oil prices have fallen around $20 from their
peak, support at $120 held and that means there is the
potential for prices to rise back to record levels again," said
Shuji Sugata, manager at Mitsubishi Corp Futures and Securities
in Tokyo.
Regional bonds fell as some of the risk aversion that had
been priced in receded, though trading was thin in markets such
as Japan, where September 10-year JGB futures <2JGBv1> fell
0.04 point to 136.41.
(Editing by Kim Coghill)
(Additional reporting by Geraldine Chua in SYDNEY, Eric
Burroughs, Masayuki Kitano and James Topham in TOKYO)
