* Euro skids across the board as bulls bail out
* Chinese stocks slip as government reins in bank lending
* Other stocks higher on Wall St bounce, IBM results
* U.S. Republican win deals heavy blow to Obama reform
agenda
SYDNEY, Jan 20 (Reuters) - The euro slumped to four-month
lows on Wednesday as the loss of a crucial support level
triggered a wave of selling from investors afraid the single
currency was embarking on a sustained slump.
Shares in China and Hong Kong also fell on reports the
government had told some major banks to stop lending for the
rest of January, in a further attempt at keeping the surging
economy from overheating.
Most other Asian stock markets were a shade firmer after
Wall Street staged a late rally and results from tech giant IBM
<IBM.N> beat forecasts and upgraded its outlook.
But the early action was in currencies as the euro
collapsed through a big chart bulwark at $1.4250, tripping a
host of automatic sell orders and taking it a cent lower to
$1.4189.
"There was no particular news behind the move," said Sean
Callow, a senior currency strategist at Westpac in Sydney.
"It was more that people just want to be bearish on the
euro now and somebody took a swing at $1.4250, forcing a load
of stop-loss sales," he explained. "It's not like investors are
really excited about the U.S. dollar either."
The euro has been worn down in recent weeks by worries over
the fiscal health of Greece and took a fresh blow on Tuesday
from a disappointing survey of German investor sentiment. See
[] and [].
Its losses camne across the board, hitting a five-month low
on the British pound <EURGBP=R> and a nine-year trough against
the Australian dollar <EURAUD=R>.
That drop helped lift the U.S. dollar up against a basket
of currencies to a one-week high at 77.829 <.DXY>, though it
made little progress on a broadly firm yen at 91.17 <JPY=>.
STOCKS
Shares in China and Hong Kong fell after sources said the
authorities had instructed some major banks to stop lending for
the rest of January after they went on a lending binge early in
the month. []
The Shanghai Composite <> dropped 1 percent, while the
benchmark Hang Seng Index <> was down 1 percent, weighed
down by big Chinese banks such as Bank of Communications
<3328.HK>, which fell more than 2 percent.
Asian markets have been rattled in recent weeks by China's
gradual attempts to tighten policy and moderate economic
growth. Chinese demand for commodities and other imported goods
from its neighbours has provided a major boost to the region in
the absence of a strong rebound in key Western markets.
The MSCI Asia-Pacific index excluding Japan eased 0.23
percent <.MIAPJ0000PUS>, even though most other markets in the
region edged higher. The Thomson Reuters index of regional
shares <.TRXFLDAXPU> was up around 0.25 percent.
Japan's Nikkei <> added 0.5 percent, buoyed by
resource shares on stronger commodity prices and gains in U.S.
markets.
Tha gains followed a late rally on Wall Street which got a
lift from signs that a U.S. Senate race could hamper the Obama
administration's reform agenda.
Initial results from the race showed the Republican
contender had won the seat, thus breaking the Democrat's
super-majority in the Senate. That was seen benefiting U.S.
insurers and pharmaceutical companies in particular if
healthcare reform floundered.
The Dow Jones industrial average <> ended up 1.09
percent, while the Standard & Poor's 500 Index <.SPX> gained
1.25 percent.
Traders felt sentiment should be supported by upbeat
results from IBM after the bell on Tuesday. []
The tech giant raised its profit target for 2010 and
reported a better-than-expected 9 percent rise in fourth
quarter earnings, as cost cuts and a shift to more profitable
contracts helped it weather a slump in corporate spending.
Its shares fell slightly after-hours but that looked like
classic a "buy on the rumours, sell on the fact" pullback. They
were still up nearly 60 percent over the past year and
Tuesday's close had been the highest since September, 2000.
Australia's benchmark ASX index <> rose 0.7 percent to
4,895.3, supported in part by record production figures from
the country's biggest miner, BHP <BHP.AX>.
BHP's shares rose 1 percent after the miner gave an upbeat
outlook for commodity prices, citing insatiable demand from
China. []
Ironically, most commodity prices were under pressure on
Wednesday from the rise in the U.S. dollar. Oil <0#CL:> slipped
37 cents a barrel and gold slipped to $1,134.30 <XAU=>.
Platinum broke the mold surging to a fresh 17-month high
around $1,654, helped by the launch of a new U.S.-based
exchange trade fund backed by the metal.
(Editing by Kim Coghill)
