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By Tom Miles
HONG KONG, May 16 (Reuters) - Asian stocks rose cautiously
on Friday as the dollar steadied against the yen and oil prices
hovered below record highs, offering a rare lull in the
market's gyrations.
Most stock markets across Asia were modestly higher, but
Sydney's main index surged back towards the 6,000 mark, last
glimpsed in February, as top miner BHP Billiton <BHP.AX>
jumped, propelled by speculation of Chinese interest in the
firm.
Japan's Nikkei average <> was up 0.2 percent by 0300
GMT, while MSCI's index of other Asian stock markets
<.MIAPJ0000PUS> was up 0.9 percent, driven by a 1.3 percent
rise in Sydney's benchmark <>.
Global stocks festered at the start of this year as worries
about the credit crisis and the state of the U.S. economy
corroded profits and rattled banks. But Wall Street's fear has
subsided and Thursday brought the CBOE Volatility Index <.VIX>
to its lowest close since October and the S&P 500 <.SPX> and
Nasdaq <> to their highest closing levels since early
January.
U.S. equities were helped by a pull-back in oil prices,
which eased concerns about inflation, and a battle to control
Yahoo Inc <YHOO.O> that helped the tech sector.
The U.S. tech rally offered little comfort to South Korean
tech firms such as LG Display <034220.KS>, which shed 7 percent
after Lehman Brothers said its profitability had already peaked
and would not improve in the rest of 2008.
Other tech stocks retrenched after historic highs in the
previous session but Seoul's main index <> still managed
to rise 0.3 percent to a 2008 peak.
"Stronger than expected earnings from Wall Street and
easing worries about the credit crisis are fuelling the
market's upward momentum," said Won Jong-hyuk, a market analyst
at SK Securities.
"The index could hit its historical high of 2,085 again by
the second half of this year. But we are likely to see some
volatile patches along the way," Won added.
Taiwanese stocks got an extra fillip as investors savoured
the prospect of improved ties with China after President-elect
Ma Ying-jeou takes office next week. The main TAIEX index
<> rose 0.6 percent to its highest level this year.
QUAKE FUELS OIL
Asian exporters such as Honda Motor Co <7267.T>, which rose
3 percent, are benefiting from a renewed confidence in the
dollar, which held steady at around 104.65 yen <JPY=> despite
the latest rash of ugly U.S. economic data. It inched down
against the euro <EUR=> following stronger-than-expected euro
area first quarter growth data.
Reports from the U.S. Federal Reserve on Thursday showed
factory activity in the mid-Atlantic region shrinking for a
sixth straight month in May and New York state's manufacturing
declining [].
"The U.S. data raised concerns about growth while euro zone
data suggested the region's economy is still more solid than
the U.S.," said a senior dealer at a European bank.
"Major currencies are likely to be confined to narrow
ranges as players are still unsure of what to focus on, and
with positions largely brought back to neutral after recent
adjustments," he said.
Neither the dollar's strength nor the weak U.S. data were
enough to put a serious dent in oil prices. U.S. crude oil
<CLc1> firmed towards $125 a barrel after a volatile Thursday,
when a big rise in U.S. natural gas inventories triggered a $5
plunge and a $3 bounce in crude prices.
Prices remained firm on Friday as Chinese demand for
heating oil and diesel following Monday's devastating
earthquake stretched supplies of refined products, with Chinese
oil firm PetroChina <0857.HK> seen buying a third more diesel
in June than in May.
"Global supply of distillates is very tight," said Tetsu
Emori, fund manager at Astmax Co Ltd in Tokyo.
NYMEX heating oil <HOM8> was up 0.181 cents, a whisker
below Wednesday's record high of $3.7228.
Oil markets may get a fresh impetus as U.S. President
George W. Bush heads for Saudi Arabia on Friday to renew his
appeal to help tame record oil prices and try to shore up Arab
support to contain Iran's growing regional clout.
