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* India, Australia lead Asian shares higher
* Dollar holds firm on upbeat U.S. economic news
* Oil, gold prices capped by robust dollar
* European stocks set to extend rally into third day
(Updates to afternoon, adds European markets)
By Yoo Choonsik
SEOUL, Dec 23 (Reuters) - Indian and Australian shares led
Asian stock markets higher on Wednesday, while oil and gold
came under pressure as the dollar held firm thanks to optimism
about the U.S. economy.
Leading European stock market indexes were expected to open
slightly higher, extending a sharp two-day winning run,
according to financial spreadbetters, while U.S. equity stock
futures <SPc1> were 0.4 percent higher.
"The market atmosphere is not bad at all, but volume is
pretty thin as the end of the year approaches," said Lee
Sun-yeb, a market analyst at Shinhan Investment Corporation in
Seoul, referring to the South Korean market's <> rise on
hopes for a U.S. economic recovery.
The MSCI index of Asia Pacific stocks traded outside Japan
<.MIAPJ0000PUS> rose 0.8 percent.
India's 30-share BSE Index <> jumped more than 2.5
percent to a one-week high and Australia's benchmark S&P/ASX
200 stock index <> rose 0.8 percent to a three-week
closing high, both led by banks.
Tokyo's stock market was closed for the Emperor's birthday
holiday, dampening activity in Asia..
Shares in China Pacific Insurance <2601.HK>, the country's
third-largest life insurer, dipped in the early hours of their
trading debut and traded 0.9 percent higher by 0757 GMT,
drawing some investor attention in an otherwise lacklustre
market.
The share sale raised $3.1 billion and was the world's
seventh-largest this year.
DOLLAR CAPS OIL, GOLD
U.S. crude oil for February delivery <CLc1> edged up 6
cents to $74.46 a barrel in thin trade, after rising 68 cents
on Tuesday on industry data showing a sharp draw down in U.S.
crude stocks, but the upside potential was capped by the firm
dollar.
The dollar was holding at 91.70 yen <JPY=> after notching a
two-month high of 91.86 yen and remained firm elsewhere,
although traders grew wary of increasing dollar sales by
Japanese exporters at 92.00 yen.
Gold prices edged higher on bargain hunting after the price
dropped to its weakest in seven weeks the previous day, but the
firmer dollar capped the upside potential.
"This correlation with the U.S. dollar seems to be one of
the most important factors right now," said Wong Eng Soon, an
investment analyst at Phillip Futures in Singapore.
Spot gold <XAU=> was quoted at $1,086.20 an ounce at 0739
GMT, bouncing after falling to as low as $1,074.10 in New York
overnight, which was its lowest level since early November.
(Editing by Jan Dahinten)
