* US Treasury yields flat ahead of record week of new
supply
* Property, financials help Hong Kong stocks outperform
* How much longer can Chinese demand for commodities last?
(Repeats item to more subscribers without changes in text)
By Kevin Plumberg
HONG KONG, June 22 (Reuters) - Asian stocks rose on Monday,
with Chinese bank stocks getting a boost on hopes lending will
stay strong, while U.S. Treasury yields were flat before a
weekly record of $104 billion in new debt hits the market.
The U.S. dollar and yen rose on caution ahead of a Federal
Reserve meeting this week, when policymakers may extend
programmes to keep borrowing costs low, with government bond
yields still broadly in a rising trend. []
Major European stocks were expected to open lower,
financial bookmakers said, hurt by weakness in resource-related
shares as commodity prices slide on uncertainty about future
demand.
Until markets gain a clearer picture of the Fed's
intentions and its views on the nascent recovery, dealers would
likely keep asset markets in narrow ranges, taking profits on
small price rises.
"The Fed needs to find a balance between not killing the
recovery through rate hike hopes, while at the same time not
over-committing on keeping rates low," Ashley Davies, currency
strategist with UBS in Singapore, said in a note.
Equity markets mostly climbed, with buying concentrated in
the telecommunications, technology and financial sectors.
The MSCI index of Asia Pacific stocks outside Japan rose 1
percent <.MIAPJ0000PUS> and is up 52 percent since a global
equity rally began on March 9.
Throughout Asia, the technology and consumer discretionary
sectors have had the sharpest increase in 12-month forward
earnings expectations in the last 30 days, according to data
from Thomson Reuters via Starmine Professional.
The consumer discretionary sector was also the most
expensive, on a forward price-to-earnings basis.
Japan's Nikkei share average <> finished 0.4 percent
higher, and is up 38 percent since March 9.
Hong Kong's Hang Seng index <> rose 2.5 percent, with
banks and property-related shares providing the main boost.
Chinese banks were boosted by news suggesting credit in China
remained abundant.
Centralised infrastructure projects helped generate loan
growth of 6.5 trillion yuan ($951 billion) in the first half of
this year, the Shanghai Securities News reported.
[]
The ICE Futures U.S. dollar index <.DXY>, a gauge of its
value against a basket of six other major currencies, rose 0.2
percent, but remained in a range carved out in the last month.
The Australian dollar was one of the biggest movers on the
day, falling 0.8 percent against the dollar to US$0.7999 <AUD=>
and 0.9 percent against the yen to 76.80 yen <AUDJPY=R> as
metals prices fell on concern Chinese restocking could soon
wind down.
China's imports of refined copper hit a record in May, up
from a previous record in April and were 258 percent higher
than a year earlier. However, speculation spread that the pace
of demand was unsustainable, and copper for delivery in three
months on the London Metal Exchange <MCU3> fell $159 to $4,866
a tonne.
A FINE BALANCE
U.S. Treasuries were trading largely unchanged, with the
benchmark 10-year yield at 3.80 percent <US10YT=RR>.
The Fed will have to strike a fine balance when it releases
a statement at the end of a two-day meeting on Wednesday.
While many analysts do not expect the Fed to increase the
$300 billion in planned purchases of Treasuries, $200 billion
in U.S. agency debt and $1.25 trillion in agency
mortgage-backed securities, they also do not think policymakers
will break new ground with regard to exiting programmes to keep
interest rates low. []
The worst of the financial crisis has likely passed, though
the direct purchases of government and mortgage-related debt
have had a somewhat limited impact, with the 30-year mortgage
rate up some 70 basis points in the last month.
Oil fell towards $69 a barrel, extending the previous
session's drop of more than 2 percent, as bearish sentiment
over gasoline markets in the United States continued to
dominate investors' concerns.
"In May, the market was pricing in that there would be a
gasoline shortage but the latest data is obviously showing that
it is not happening," said Ben Westmore, a commodities analyst
at the National Australia Bank.
"There are also high stockpiles of crude oil, so the
general market sentiment is that the balance of demand and
supply in the market hasn't improved too much."
U.S. crude for July delivery <CLc1> fell 12 cents to
$69.43, after tumbling $1.82 on Friday, posting a weekly loss
of more than 3 percent. London Brent crude was flat at $69.19
<LCOc1>.
