* MSCI Asia underperforms MSCI world by 5 points this year
* Selling pressure to continue in the near term
* Taiwan ends down more than 2 percent
* Metals gain on strong U.S. jobless data
By Saikat Chatterjee
HONG KONG, Feb 11 (Reuters) - Asian stocks fell more than a
percent and were on course for their biggest weekly loss in nine
months as investors shunned risk on concerns about the pace of
policy tightening in the region and growing tensions in Egypt.
A broad sell-off in Asia since the start of 2011 on
inflationary worries has shown no signs of abating, as
expectations of more monetary tightening have encouraged
investors to shift funds from emerging to developed markets.
Analysts said the selling in emerging markets could have
some more room to run, especially in countries where stocks are
ripe for a pullback after last year's stellar gains and the near
term interest rate outlook is unclear.
On Friday, Taiwan shares ended down more than two
percent, stock markets in Thailand and Korea were
down one percent, while Australia's benchmark index
snapped a seven-day winning streak a investors took profits from
banking and resource shares.
MSCI's index of Asia Pacific shares-ex-Japan
is set to fall by more than 4 percent this week, its worst
performance since May 2010.
So far this year, Asian shares have underperformed the MSCI
world index by five points as traders cut
positions due to a steady drip of strong data out of the U.S.
"Pressure on emerging market equities may well, therefore,
continue while uncertainties about the intensity, duration and
effect of the ongoing tightening cycle remain alive," Barclays
strategists said in a weekly note.
This week alone, China raised interest rates, Philippines
held rates but raised its inflation forecast and Bank of Korea
surprised markets by holding rates steady, although it is widely
expected to tighten again in March.
Foreign selling has picked up in Asian shares, especially in
South Korea this week while offshore selling in Taiwan on
Thursday was the biggest in six months.
Indonesian shares fell 0.6 percent with shares in PT
Garuda Indonesia , the nation's state-owned carrier,
tanking by more than 20 percent on debut.
Japanese markets were closed for a national holiday.
METALS GAIN
Copper rose back above $10,000 per tonne, while tin
prices hit a record high as strong U.S. jobless data reassured
investors about the pace of the recovery in the world's biggest
economy. .
Egyptian President Hosni Mubarak's plans to relinquish
powers but not step down did little to boost investor hopes of a
quick solution to the Egyptian crisis and lifted oil prices
.
Gold , was steady at around $1,364 an ounce and U.S.
crude oil futures rose 88 cents to $87.61 a barrel. .
In the currency markets, the dollar edged higher after
notching up solid gains against the euro overnight and after
traders said the European Central Bank stepped in to rescue a
failing Portuguese bond auction. .
Broad trading patterns in the euro are in line with
wave formations and the single currency may be in the initial
stages of what may be a decline towards the lower end of a broad
1.3250-1.3850 range.
"Any easy gains in the euro are susceptible to rapid
reversal," said David Watt, senior currency strategist at RBC
Dominion Securities.
The Australian dollar extended losses after the
central bank said interest rates were likely to be on hold for
some time. .
(Additional reporting by Ian Chua, Reuters FX analyst Krishna
Kumar in SYDNEY and Nick Trevethan in SINGAPORE; Editing by
Tomasz Janowski)
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