(Adds details, update prices)
* Brent oil up more than $2, but still off last week's highs
* Nikkei up 0.9 pct, markets in rest of Asia edge higher
* Dollar eases vs Swiss franc, off last week's record low
* Outflows from emerging market equities persist -EPFR
By Masayuki Kitano
SINGAPORE, Feb 28 (Reuters) - Asian shares rose on Monday as
financial shares clawed back some of last week's losses and
higher oil prices buoyed energy stocks, but gains were capped by
fears of futher outflows from emerging equities to developed
markets.
London crude prices rose by more than $2 at one point to
$114.50 a barrel as worsening turmoil in Libya spurred
fresh concern about disruptions to oil production.
Recent unrest in the Middle East pushed London crude prices
to nearly $120 last week, their highest level since August 2008,
exacerbating worries about inflationary pressures in emerging
Asian economies.
Market players said emerging Asian stock markets may
continue to underperform compared to developed markets such as
Japan and the United States.
Underscoring the recent trend, MSCI's index of Japanese
shares rose 1 percent, taking its gains for far
in 2011 to nearly 6 percent, while its Indonesian index has shed
some 7.5 percent .
"There are strong concerns about inflation based on
excessive liquidity and emerging markets have been hurt more by
this," said Mitsushige Akino, chief fund manager at Ichiyoshi
Investment Management in Tokyo.
"Developed countries...are not raising interest rates while
emerging markets are in the midst of doing so. That is negative
for (emerging market) equities and that trend will probably
still continue," Akino added.
The Nikkei recouped early losses to end 0.9 percent
higher on Monday, with some traders attributing the bounce to
futures-led buying on a weaker yen against the euro and to
month-end window dressing.
Some Japanese financial shares saw strong gains with Mizuho
Trust & Banking Co Ltd jumping 6 percent after a source
told Reuters that its parent Mizuho Financial planned
to buy it out along with two other units.
MSCI's index of Asia-Pacific shares outside Japan
edged up 0.2 percent after hitting three-month
lows last week on worries that anti-government protests would
spread to other Middle East oil producing countries. The
ex-Japan index has lost more than 3 percent so far this year.
Part of the divergence with developed markets likely
reflects position unwinding, said Adrian Foster, head of
financial markets research with Rabobank International in Hong
Kong.
Late last year, massive liquidity driven rallies in global
equity markets helped give a boost to emerging market shares,
Foster said.
"That largely explains why (emerging) equity markets this
year have been quite weak. Just the unwinding of these...
particularly in India and also in Indonesia," Foster added.
A growing aversion to risky assets in the week to Feb. 23
fueled the biggest flows to global bond funds in more than three
months, and turned more investors away from emerging market
stocks, according to fund tracker EPFR Global.
With more than $20 billion leaving emerging market stock
funds since mid-January, it is the longest period of outflows
since the financial crisis deepened in September 2008.
DOLLAR FINDS FOOTING
The dollar found a steadier footing, having rebounded after
hitting a record low against the Swiss franc on Friday, but the
mood remained cautious given tensions in Libya and fears of
contagion.
The dollar last stood at 0.9270 francs , down 0.2
percent on the day but above a record low of 0.9229 hit against
the safe haven Swiss currency on trading platform EBS on Friday.
The euro dipped 0.1 percent against the dollar to $1.3744
, but the single currency was seen staying in favour ahead
of a European Central Bank meeting this week.
"With rising commodity prices, the ECB will likely continue
its tough talk on inflation, increasing the probability of early
ECB tightening," BNP Paribas analysts wrote in a note.
Traders said the euro ran into some profit-taking as did the
Australian dollar, which fell 0.3 percent to $1.0143 .
Elsewhere, benchmark 10-year U.S. Treasuries rose 6/32 in
price to yield 3.394 percent on worries that higher
fuel prices could stunt economic growth, while gold edged
up 0.3 percent to $1,413.10.
Gold, a traditional safe haven, was on course for a 6.2
percent monthly gain, its biggest since November 2009.
(Additional reporting by Osamu Tsukimori in Tokyo and Ian
Chua in Sydney; Editing by Richard Borsuk)
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http://blogs.reuters.com/globalinvesting
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http://blogs.reuters.com/macroscope
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