* Euro may head to $1.32 in near term after Portugal bond
sales
* Financial stocks shine; HSBC stock outperforms a second
day
* Inflation haunts as oil, grain prices climb
By Kevin Plumberg
HONG KONG, Jan 13 (Reuters) - The euro dipped on Thursday
but could head higher if Spain and Italy, like Portugal, also
find decent demand for their debt, while U.S. oil prices crept
up to $92 a barrel, potentially straining consumers who are
already watching food prices climb.
Promises from China and Japan to support Europe through
its fiscal crisis have also helped to keep the euro around
$1.31 and the closeout of small bets against the euro could
push it up above $1.32 in the near term, particularly as
global equity markets hit two-year highs.
The euro zone's financing troubles have generally dragged
on investors' appetite for risk taking, though signs that
highly indebted European countries are able to tap capital
markets albeit at high borrowing costs, may put risk seeking
back in play.
Japan's Nikkei share average rose 0.7 percent to
an eight-month high, with stocks of large exporters among the
biggest boosts to the index.
"The strong bond auction in Portugal has calmed the
markets and with no major negative factors in sight, foreign
funds continue buying lagging banking and property shares,"
said Mitsushige Akino, chief fund manager at Ichiyoshi
Investment
Management, in Tokyo.
Japanese bank stocks outperformed for a second day as
foreign investors kept loading up on previously underweighted
financials. Shares of Mitsubishi UFJ Financial Group ,
Japan's biggest bank by assets, gained 1.3 percent.
HSBC Holdings was in focus on Thursday
after its London-listed shares climbed 3.8 percent overnight,
the biggest single-day gain since August 2010.
The Hong Kong-listed shares of the company were up 1.2
percent and have risen 8.5 percent so far in January on heavy
trading volumes, as investors bet the bank would catch up with
the share price gains of rival Standard Chartered Plc
.
The MSCI index of Asia Pacific shares outside Japan was up
0.6 percent , within striking distance of a
2-1/2-year high that has been tested twice in the past two
months.
The materials and financial sectors led gains in the MSCI
index.
The MSCI all-country world index edged up to the highest
since Sept. 2, 2008 , having risen 20 percent
since September 2010, when investors began to factor in the
impact of further monetary easing by the Federal Reserve.
EURO BOUNCE ONLY TEMPORARY?
The euro was holding at $1.3100 , down 0.2 percent
on the day but up around 1.8 percent so far on the week.
Traders may take a shot at the low from Jan. 3 at $1.3248
in the next few sessions, though that probably depends on how
well Spain's 3 billion euro two-year bond auction and Italy's
combined 7 billion euro debt auctions go.
"We can't help feeling that the bounce in sentiment will
prove temporary and whilst it may continue over the short-term
with attendant upside risks for the euro, it is unlikely to
last for long unless concrete measures are unveiled by the
authorities in Europe," Mitul Kotecha, global head of foreign
exchange strategy with Credit Agricole CIB in Hong Kong, said
in a note.
For now, Portugal's successful fund raising in the bond
market, and at a lower cost for its 10-year debt issue, along
with encouraging euro zone industrial production data, helped
put a spring in the step of the common currency.
U.S. crude oil prices <CLc1> edged up 0.1 percent, to
$91.94 a barrel after crude stocks in the world's largest oil
user fell more than expected and a cold weather stoked demand
for heating oil in the U.S. Northeast.
Brent crude for February delivery was up 0.2 percent to
$98.35 a barrel <LCOc1>, closing in on the milestone of $100.
Food inflation remained a global concern, with no apparent
let up in climbing prices.
U.S. corn futures <Cc1> jumped 1.5 percent on Thursday,
while soybeans <Sc2> rose nearly 1 percent to their highest in
almost 2-1/2 years, buoyed by a surprisingly deep cut in the
U.S. Agriculture Department's forecast for U.S. corn and
soybean stocks.
(Additional reporting by Antoni Slodkowski in TOKYO; Editing
by Kim Coghill)
