* Crude down $10 this week on hurricane outlook, U.S.
dollar
* All eyes on company earnings as forecasts downgraded
* South Korea finance officials call for calm
By Kevin Plumberg
HONG KONG, July 9 (Reuters) - Asian stocks bounced on
Wednesday, after oil fell sharply and the head of the Federal
Reserve said efforts to help Wall Street banks may continue for
longer, easing fears inflation and the credit crisis could
worsen a global slowdown.
Crude prices have fallen around $10 so far this week to
$135.76 a barrel <CLc1> as the U.S. dollar gained and
indications an Atlantic hurricane would bypass offshore oil
platforms.
Clearer weather also caused corn prices to fall though the
cost of soybeans, a major import for China, climbed 1 percent.
The mood was cautious, however, as more companies have seen
their earnings expectations downgraded in recent days to
reflect the crippling combination of higher costs as a result
of price pressures and sluggish demand.
"Eyes are on corporate earnings and their outlook
comments, and investors will react ruthlessly to disappointing
numbers or comments at times like this," said Won Jong-hyuk, an
analyst at SK Securities in Seoul.
"Foreign investors will probably react more sensitively to
U.S. bank earnings. Some signs of changes for the better are
much awaited," Won added.
Japan's Nikkei share average <> rose 1.7 percent in
early trading, rebounding from a three-month low the previous
session. Exporters with high-profile brands, such as Honda
Motor Co Ltd <7267.T> and Canon Inc <7751.T> were among the
biggest boosts to the index.
South Korea's benchmark KOSPI <> climbed 1.3 percent,
up from the lowest close since April 2007 on Tuesday. But
shares of LG Display <034220.KS> dropped 5 percent ahead of its
quarterly results.
The country's finance ministers were out in full force on
Wednesday, trying to calm the frayed nerves of investors who
have knocked Korean shares down nearly 19 percent this year.
"I acknowledge there are difficulties but corporate profits
are relatively good and fund flows around the stock markets are
abundant," Vice Finance Minister Kim Dong-soo said at a hastily
arranged meeting to discuss markets. "I hope investors will not
react too sensitively."
Shares of companies in the Asia-Pacific region <.MSCIAPJ>
were up 1 percent on the day but down 23 percent on the
year-to-date, according to an MSCI index. The all-countries
world index <.MIWD0000PUS> on Tuesday slipped to the lowest
since October 2006.
EARNINGS TAKE CENTRE STAGE
Fed Chairman Ben Bernanke said overnight the central bank
was willing to keep its emergency lending facility open into
2009, calming investors after a Lehman Brothers research report
said the two largest U.S. mortgage funders may be forced to
raise a combined $75 billion in capital. []
Those comments helped to lift shares in the U.S. financial
sector 5.7 percent and supported the dollar.
The euro was trading largely unchanged on the day at
$1.5655 <EUR=>, while the dollar was flat at 107.42 yen <JPY=>.
Since mid-March, when the Fed backed a plan for JPMorgan
effectively to bail out Bear Stearns after a run on the bank
pushed it to near bankruptcy, the dollar has stabilized. The
New York Board of Trade's U.S. dollar index <.DXY> has risen
2.2 percent since then.
U.S. aluminium company Alcoa inc <AA.N> kicked off the
earnings season on an upbeat note, after it reported
better-than-expected quarterly earnings. Industrial
comglomerate General Electric <GE.N> and South Korea's POSCO
<005490.KS>, the world's fourth-largest steel maker, will both
report results on Friday.
Consensus forecasts of 6.7 percent earnings growth in Asia
excluding Japan have fallen from 11.5 percent at the beginning
of the year, though earnings are at risk of growing by less or
even contracting this year, according to some analysts.
"Expectations six months ago were that the economy was
booming and that's clearly not the case," said Hans Kunnen,
head of investment markets research at Colonial First State in
Sydney.
Japanese government bonds slipped after rising shares on
Wall Street and the Nikkei curbed demand for safe-haven debt.
The benchmark 10-year yield <JP10YTN=JBTC> rose 1 basis
point to 1.625 percent, following a brief stint at 1.650
percent.
