(Updates prices)
By Nina Mehra
HONG KONG, Jan 9 (Reuters) - Asian markets bounced back
from earlier three-week lows on Wednesday on a media report the
United States is considering tax rebates, easing recession
concerns in Asia's top export market.
The Wall Street Journal, citing sources familiar with the
matter, reported that the U.S. government was looking at
options such as a $500 tax rebate for households and tax breaks
for business.
The dollar rose against the yen <JPY=>, but uncertainty
about the global economy remained, with oil prices extending
gains in Asia. Safe-haven gold hit a record high.
European stocks were expected to open sharply lower,
according to financial bookmakers, with Britain's FTSE 100
<> seen down 66-67 points and Germany's DAX <> 66-78
points lower.
"It's now becoming much more clear that the situation in
the United States isn't good, and this is raising expectations
of new policies," said Hiroichi Nishi, general manager at the
equity division of Nikko Cordial Securities.
MSCI's index of Asia Pacific stocks outside Japan
<.MIAPJ0000PUS> was up 0.6 percent at 0710 GMT, after earlier
touching its lowest since Dec. 21. The index began the day with
steep losses after AT&T Inc <T.N> warned of soft U.S. consumer
spending, heightening U.S. recession fears. []
Perceptions that some shares, such as South Korean chip
maker Hynix Semiconductor Inc <000660.KS>, were oversold also
helped markets recover.
The MSCI index has dropped 2.2 percent so far this year, on
reports the U.S. may be heading for a sharper-than-expected
slowdown at a time when investors are already concerned about
the condition of global credit markets.
Data last week showed Singapore's export-driven economy
shrank for the first time since 2003 in the fourth quarter.
Japan's benchmark Nikkei <> bounced back from an
18-month low to end up 0.5 percent as exporters rallied on the
dollar's gains that help boost the value of their overseas
earnings.
South Korea <> gained 1 percent after earlier hitting
a six-week low, while Hong Kong <> also rose 1 percent.
But financials, including South Korea's Kookmin Bank
<060000.KS>, retreated as bankruptcy rumours at U.S. lender
Countrywide Financial <CFC.N>, later denied, sparked fears of a
wider fallout from the U.S. subprime crisis. []
SAFETY STILL SELLS
Spot gold <XAU=> sprinted to a record $891 an ounce in
Asian trade, topping the previous high set overnight.
"Gold is bullish. Funds are pouring into markets as they
are performing well when stocks are slumping," said Tatsuo
Kageyama, an analyst at Kanetsu Asset Management. "The speed of
gold's rise is very fast, but the market is focusing on taking
gold towards $900 in the near term."
Other safe-haven bids also did well, with Japanese
government bond futures hitting a one-month high.
Oil prices extended their gains in Asia, after rising $1
overnight on the threatened disruption of Nigeria's oil supply
and lower U.S. crude stocks.
U.S. crude futures <CLc1> rose to $96.77, while London
Brent Crude <LCOc1> traded up at $95.85.
The dollar was at 109.63 yen <JPY=>, pulling away from a
six-week low of 107.90 yen hit last Friday.
Traders in Tokyo said the dollar was also supported by
corporate demand and buying from Japanese institutional
investors.
(Editing by Ian Geoghegan)
