* Global markets fall as China starts tightening policy
* Commodities hit hard on fears Chinese demand will slow
* Commodity currencies such as Aussie dollar also retreat
HONG KONG, Jan 13 (Reuters) - Stock markets and commodities
fell in Asia on Wednesday after Beijing's surprise decision to
raise banks' reserve requirements sparked concerns that China's
rapid economic rebound would slow, curbing demand for natural
resources and other imported goods from around the region.
High-yielding "commodity" currencies such as the Australian
dollar <AUD=> also weakened after the move by the People's Bank
of China late on Tuesday, which appeared to be prompted by
concerns that inflation could flare up if the economy
overheated. []
But the yen strengthened on short-covering as investors
unwound trades linked to a broad range of higher-yielding
assets, while U.S. Treasuries and Japanese government bonds
also gained in response to weaker stocks.
A disappointing start to the U.S. earnings season also
weighed on investor sentiment with a profit warning from
Chevron Corp <CVX.N> following on th heels of
weaker-than-expected results from aluminum maker Alcoa Inc
<AA.N>. The S&P 500 ended 0.9 percent lower. []
Fears that China is getting ready to use more forceful
measures to cool the economy, including interest rate hikes,
also pulled down U.S. and European stocks on worries about a
potential slowdown in Chinese demand, with exporters facing the
brunt of the selling.
While China is stepping in to moderate rapid economic
growth, many Western countries are still trying to stimulate
demand. The MSCI index of Asia Pacific stocks traded
outside Japan <.MIAPJ0000PUS> was down 0.46 percent, pulling
away from the 17-month high it struck on Tuesday. The index of
materials stocks <.MIAPJMT00PUS> was down 1.1 percent.
The Thomson Reuters index of regional shares <.TRXFLDAXPU>
was down 0.17 percent.
Shanghai shares <> opened 2.1 percent lower.
Commodity-linked currencies such as the Australian and New
Zealand dollar <NZD=> were both on the defensive following the
moves by China -- a major importer of commodities.
Shanghai aluminium fell by its 5 percent daily limit and
zinc also came close to its downside threshold.
Benchmark third-month Shanghai aluminium <SAFc3> fell 900
yuan to 17,085 in early trade, while zinc <SZNc3> dipped to
20,110 yuan, just 25 yuan short of its downside limit.
The PBOC said it will increase commercial lenders' reserve
requirement ratios (RRR) by 50 basis points as of Jan 18,
making China one of the largest economies to start rolling back
the emergency policies used to combat the crisis fallout.
The bank reserve increase also followed two other
tightening steps taken by the PBOC bank on Tuesday.
The central bank raised the yield on its regular sale of
one-year bills by about 8 basis points, the first increase in
20 auctions and higher than forecasts for a rise of 4 basis
points.
It also drained a record 200 billion yuan via 28-day bond
repurchase agreements, ensuring it will draw net funds from the
market this week. []
(Reporting by Umesh Desai)
