* Oil prices rise $1 on Libya violence
* Asia-ex Japan equity funds see big outflows - EPFR
* Shanghai, Hong Kong stocks drop on China policy move
* Asia FX outlook brightens as more gains seen
By Saikat Chatterjee
HONG KONG, Feb. 21 (Reuters) - Oil prices jumped a dollar
and Asian stocks slipped on Monday as spreading tensions in
Libya and other oil-producing regions encouraged some profit
taking after last week's solid gains.
Brent crude oil futures and U.S. crude futures
both vaulted around $1/bbl to $103.50 and $87.31 per
barrel respectively, while gold prices inched higher,
adding to last week's gains of nearly 3 percent.
Anti-government protesters rallied in Tripoli's streets at
the weekend, tribal leaders spoke out against leader Muammar
Gaddafi, and army units defected to the opposition as oil
exporter Libya endured one of the bloodiest revolts to convulse
the Arab world.
Beijing's latest move to tighten policy in the form of
banks' required reserve increases saw Shanghai and Hong
Kong stocks take a tumble with lenders leading declines.
.
The MSCI's index of Asia Pacific shares outside Japan
eased by 0.3 percent after advancing 2.5 percent
last week, its best weekly performance in two months.
"There are few buying or selling cues in the domestic
market. Investors will likely stay alert to geopolitical news
that could affect markets across the world," said Hikaru Sato, a
senior technical analyst at Daiwa Securities Capital Market.
"The Middle East continues to be a focus, while there are
concerns about China."
While some stock markets across the region have somewhat
recovered after a sharp selloff in the opening weeks of 2011,
analysts say selling pressure may intensify if tensions in the
Middle East escalate further.
Asia-ex Japan equity funds saw the biggest weekly outflows
in the second week of February since the first quarter of 2008,
data from fund tracker EPFR Global showed.
Moreover, concerns that a breathtaking rally in U.S. stocks
in recent weeks, which has boosted the region's developed
markets such as Australia and Tokyo may be
nearing a close, also weighed on sentiment.
U.S. markets are shut on Monday for a public holiday.
China's benchmark short-term money market rate
soared more than 300 basis points on Monday after Beijing on
Friday raised required reserves for banks by 50 basis points to
a record 19.5 percent. .
FX VIEW BRIGHTENS
The foggy outlook for equities in the near term is in sharp
contrast to the view emerging in the region's currency markets,
where analysts are calling for more gains.
Barring the baht, yen and the rupee, all other Asian
currencies have posted substantial gains so far this year,
indicating authorities are allowing more currency strength to
tackle inflation.
A monthly Reuters poll showed investors increased their long
positions on the Indonesian rupiah, Singapore dollar, Philippine
peso and the Chinese yuan while Standard Chartered strategists
recommended overweight bets on Asian currencies.
.
China's move to nudge the yuan's daily mid-point
fixings higher recently has also fueled gains.
Elsewhere, the euro held firm after comments from a
European Central Bank official kept alive the prospects for the
ECB to hike rates before the Fed, while the Aussie was
resilient in the face of China's latest policy move.
The common currency last traded near $1.3700 , having
briefly risen to around $1.3727 with trading likely confined to
ranges due to the U.S. holiday on Monday. .
The G20 meeting's outcome had little impact on markets after
policymakers reached a fudged accord on how to measure
imbalances in the global economy after China prevented the use
of exchange rates and currency reserves as indicators.
.
Meanwhile, spreading unrest in North Africa and the Middle
East continued to push commodities and precious metals higher.
(Additional reporting by Ian Chua in SYDNEY; Editing by
Richard Borsuk)
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