(Updates with European outlook, fresh prices)
By Tom Miles
HONG KONG, Jan 31 (Reuters) - Asian stocks ended one of the
worst months on record on a slightly brighter note on Thursday,
brushing aside worries about top U.S. bond insurers' credit
ratings, while the latest U.S. interest rate cut weighed on the
dollar.
MSCI's measure of Asia Pacific stocks excluding Japan
<.MIAPJ0000PUS> was up 0.9 percent at 0700 GMT, but remained on
track to fall more than 12 percent in January, its worst
monthly fall since September 2001.
With U.S. gloom lingering despite a 50 basis point cut from
the Federal Reserve, financial bookmakers expected major
European markets to open 0.8-1.2 percent lower. []
"The 'Doubting Thomases' have certainly massed their
troops. Is this cut enough? Is recession just around the
corner? U.S. GDP for the fourth-quarter came in at 0.6 percent
when 1.2 percent was expected," said David Buik of Cantor
Index.
"However jobs are still being created, so the market waits
with bated breath for Friday's U.S. payroll numbers."
Speculation on financial television network CNBC that
credit rating firms might downgrade Ambac Financial Group Inc
<ABK.N> and MBIA Inc <MBI.N> pushed the Dow Jones industrial
average <> down 0.3 percent and spooked Asian markets in
early trade.
But stocks recovered ground after MBIA said private-equity
firm Warburg Pincus had made a $500 million investment in it.
TOKYO, SEOUL GAIN
Japan's Nikkei average <> ended 1.9 percent higher,
with shares of top bank Mitsubishi UFJ Financial Group (MUFG)
<8306.T> back in the black and exporters such as Toyota Motor
Co <7203.T>, Hitachi <6501.T> and Sony Corp <6758.T>, providing
some extra lift.
Seoul <> rose 2.2 percent, with battered shipbuilders
such as STX Pan Ocean <028670.KS> seen as oversold and cheered
by a 5 percent jump in the Baltic Exchange's dry freight index
<.BADI> on Wednesday.
Chip makers also rose on stabilising DRAM memory chip
prices.
"National pension funds stepped in to buy domestic stocks
after markets plunged to nine-months lows on Wednesday," said
Lee Woo-hyun, a strategist at Kyobo Securities in Seoul.
"Most possible negative news seem to be out of the bag;
U.S. recession fears, inflation, subprime mortgages ... and now
some investors are turning focus to how a recent string of
economic stimulus measures will be making an impact."
FED CUTS
The Fed's widely-anticipated half-percentage-point rate cut
on Wednesday did little to prop sentiment, with expectations
that U.S. rates will fall further keeping the dollar under
pressure.
It hit an all-time low against the Swiss franc, dipping
under 1.08 francs <CHF=> on electronic trading platform EBS
before recovering to 1.0826 francs. Against the yen <JPY=>, it
slumped towards 106 before recovering to above 106.5.
A Reuters poll showed 15 out of 16 primary dealers on Wall
Street surveyed after Wednesday's rate cut expect the central
bank to trim rates again at its next meeting in March. []
In Australia, the benchmark S&P/ASX 200 index <> ended
up 0.6 percent, but still shed 10.9 percent in January -- its
biggest ever monthly fall.
Stocks in Shanghai <>, Taiwan <> and Hong Kong
<> all fell.
Safe-haven gold <XAU=> hovered around $925 an ounce, just
shy of the record $933.10 set on Tuesday.
But an auction of two-year Japanese government bonds, often
seen as safe haven debt, produced a slightly weaker result than
expected with investors cautious of buying the maturity on
doubts whether the Bank of Japan will cut rates.
"The JGB market continues to take its cue from stocks, but
it's mainly driven by incentives to earn quick profits from
dealings rather than investment based on a clear conviction
that the Bank of Japan will cut interest rates," said Naomi
Hasegawa, a senior fixed-income strategist at Mitsubishi UFJ
Securities.
Crude oil prices <CLc1>, which had risen past $92 a barrel
on Wednesday fell as far as $90.80 in early Asian trade but
bounced back to recover most of the lost ground at $91.40.
(Additional reporting by Elaine Lies, Chikako Mogi, James
Topham and Aiko Hayashi in TOKYO; Kim Soyoung in SEOUL, Denny
Thomas and Sonali Paul in SYDNEY, Rita Chang in HONG KONG;
Editing by Lincoln Feast)
