* Mixed bag of company results leave investors uncertain
* U.S. dollar recovers on lower oil, but outlook cloudy
* Big investors like developed markets over emerging
(Repeats to more subscribers)
By Kevin Plumberg
HONG KONG, July 18 (Reuters) - Asian stocks edged up on
Friday, helped by a 10 percent decline in oil prices this week
and results from investment bank JPMorgan <JPM.N> that were not
as bad as expected, though the outlook for earnings at other
companies was less rosy.
The U.S. dollar has benefited from the decline in crude,
gaining against major currencies and improving the prospects
for Asian exporters.
However, persistent worries about the stability of the
financial sector continued to dog the currency, especially
after Merrill Lynch & Co <MER.N> posted a loss that was more
than twice as large as expected.
Asia's biggest oil refiner Sinopec Corp <0386.HK> said late
on Thursday its first-half net profit was likely cut in half
compared with a year ago, having been squeezed between soaring
crude prices and China's price caps on energy products.
[]
Crude has fallen sharply this week to below $130 a barrel
on fears about sluggish U.S. demand and slowly unwinding
political tensions between the West and Iran, the fourth
largest oil exporter.
Lower oil prices have eased some concerns about high
inflation and thinning profit margins, but given crude's 35
percent rise this year, enthusiasm was tame.
"Merrill's results were also bad. Investors are not in the
mood for a buying spree," said Masanobu Takahashi, chief
strategist at Ichiyoshi Securities. "Exporters are rising
thanks to a softer yen, but it's mostly buybacks of battered
shares," he said.
Japan's Nikkei share average <> rose 0.3 percent, with
automakers Honda Motor Co <7267.T> and Toyota Motor Corp
<7203.T> among the biggest lifts to the index.
Apart from Japan, shares in the rest of the Asia-Pacific
region fell 0.2 percent, according to an MSCI index <.MSCIAPJ>,
and were within striking distance of a 16-month low hit on
Wednesday.
Hong Kong's Hang Seng index was 0.9 percent percent higher
<>, helped by market talk about the possibility of more
pro-growth policies in China after second-quarter data released
on Thursday confirmed slower growth in the world's
fourth-largest economy.
South Korea's KOSPI <> inched up 0.2 percent, with
Samsung Electronics <005930.KS> providing the largest boost for
the second day in a row.
Australia's benchmark index <> slipped 0.7 percent,
dragged down by resource-related shares. The index is set to
post its ninth consecutive weekly loss, the longest streak in
six years.
VALUATION MATTERS
Beside Merrill Lynch, Google <GOOG.O> and Microsoft Corp
<MSFT.O> also posted lower-than-expected quarterly earnings
overnight. But IBM <IBM.N> surprised with a much
higher-than-expected profit and JPMorgan's results were helped
by underwriting and bond trading, leaving investors with a
muddled view on how the global situation of high inflation and
slow growth is affecting the bottom line.
Valuation is playing a major role in where big investors
are placing their money, according to State Street Global
Markets, which tracks 15 percent of the world's tradeable
assets.
The firm measures valuation by looking at the proportion of
market value not accounted for by book value.
On this basis, developed market valuations are the cheapest
in 20 years, while emerging market assets valuations have
remained relatively high because of the absence of credit
stress in developing countries.
"Developed equity markets are being seen as a safe haven.
Though inflation is high relative to recent history ... it has
yet to steamroller out of control," State Street analysts said
in a report.
The euro slipped 0.15 percent against the dollar to $1.5835
<EUR=>, two cents below an all-time high touched on Tuesday.
Against the yen, the dollar was largely steady at 106.30 yen
<JPY=>.
(Additional reporting by Taiga Uranaka in Tokyo)
(Editing by Kim Coghill)
