By Tom Miles
HONG KONG, March 5 (Reuters) - Asian shares made cautious
gains on Wednesday while oil and metals found some support
after slipping back from record highs, as investors stayed
focused on the threat of a U.S. recession hitting the global
economy.
The dollar was little moved near a record low against the
euro and a three-year low against the yen ahead of more data
expected to show the U.S. economy remained weak in February.
Government bond futures in Japan rose after data showed
Japanese companies cut spending on plant and equipment by
sharper-than-expected 7.7 percent in October-December.
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March 10-year futures <2JGBv1> rose 0.14 point to 138.58,
near a one-month high.
Asian stocks outside Japan, gauged by MSCI's index
<.MIAPJ0000PUS>, were up 0.2 percent by 0320 GMT, but are still
down 12 percent so far this year
Japan's Nikkei average <> was 0.2 percent lower at
12,964.4 points, with financials such as Mitsubishi UFJ
Financial Group <8306.T> hit by growing worries about domestic
demand and lingering global credit market jitters.
Bank shares suffered after a broker warning about more
losses at Citigroup <C.N> and expectations for more mortgage
defaults. The Dow <> ended 0.3 percent lower at 12,213.80,
although some support came from report that a deal to rescue
ailing bond insurer Ambac Financial Group <ABK.N> was near.
Equity buyers also took some heart from a modest correction
in oil, which fell below $100 a barrel on Tuesday for the first
time in three days after recession fears resurfaced and traders
anticipated data due later on Wednesday would show U.S. oil
inventories rising.
U.S. crude oil <CLc1> was 30 cents higher at $99.84 and
gold prices <XAU=> held steady at $963.50/4.50 after tracking
the reversal in oil.
Oil's slip lifted airlines and tech stocks such as Korean
Air <003490.KS> and LG Electronics <066570.KS>, which helped
the Korea Composite Stock Price Index <> to add 0.25
percent.
"The KOSPI's gain doesn't look secure," said Kim Hak-kyun,
an analyst at Korea Investment & Securities. "Uncertainties
linger in overseas markets although concerns over the slower
U.S. economy have already been priced in."
Taiwan's main TAIEX share index <> touched its highest
level in nearly three months, an intraday peak of 8,559.59
points, on hopes May elections will lead to closer ties with
mainland China.
"Investors are buying up selected stocks from all sectors
which could see big gains from a post-election rally, but the
looming concern is still the status and health of the U.S.
economy," said Paradigm Asset Management President Kevin Yang.
Hong Kong investors kept half an eye on any surprises from
China's annual parliamentary meeting, the National People's
Congress, which will consider administrative measures that may
have an impact on shares. The government said it aims to
counter the country's strong inflationary pressures, among
other issues.
"We'll be very sensitive to the NPC comments on economic
growth, so the market will be very volatile and very difficult
to forecast," said Steve Leung, director at UOB Kay Hian
Holdings.
But infrastructure and construction firms could gain.
"They may be getting liquidity from the government for
rebuilding projects," said Leung.
The benchmark Hang Seng Index <> was up 0.6 percent.
The dollar was little changed, holding slight gains at
around 103.35 yen <JPY=>, while investors waited to see the
Institute of Supply Management's (ISM) index of service sector
activity, which that add to expectations of more U.S. interest
rate cuts.
"If we see a weak ISM reading and then weak jobs figures
later in the week, we could see a push in the dollar/yen
towards 100 yen," said Hideki Amikura, a forex manager at
Nomura Trust and Banking.
Still, the U.S. currency remained near a three-year low of
102.60 yen hit earlier in the week, and was at 73.674 against a
basket of major currencies <.DXY>, near its lowest level ever.
(Editing by Lincoln Feast)
