* Asian shares rise as investors switch to riskier assets
* Dollar on the defensive, oil price above $72
* S. Korea signals it could be first to raise rates
* Stock futures point to firmer prices in Europe and U.S.
By Susan Fenton
HONG KONG, Sept 10 (Reuters) - Asian stocks rose on
Thursday as investors continued to switch into riskier assets
amid growing confidence the global economy is recovering,
keeping the dollar on the defensive.
After hitting its weakest value in almost a year on
Wednesday against a basket of currencies <.DXY>, the greenback
was holding just above that level on Thursday, reflecting the
shift out of less risky assets.
Oil prices <CLc1> garned some support to rise above $72 a
barrel from the weak dollar and firm equity markets but also
from OPEC's agreement to maintain output levels. []
Major European stock futures <STXEc1> and U.S. equity
futures <SPc1> were up 0.5 percent, implying firmer opens.
European Central Bank Governing Council member Erkki
Liikanen reinforced market sentiment that the world economy is
improving, saying the euro zone economy had bottomed out.
[]
South Korea signalled it could be one of the first
countries in the world to raise interest rates if house prices
jump much more. That knocked front-end Korean treasury bonds
the most in three months.
"The final decision on when and how much to adjust its
policy depends on each country's situation," Korean central
bank governor Lee Seong-tae said, adding that G20 finance
ministers' pledge last weekend to maintain growth-supporting
policies was aimed mainly at soothing markets. []
South Korean shares were swept higher though by broader
themes, rising 2.3 percent as Asian equities benefited from
rising risk appetite.
Feeding into the recovery idea, shipping and shipbuilding
companies Hanjin Shipping <000700.KS> and Hyundai Heavy
Industries <009540.KS> surged 8.8 percent and 4.6 percent
respectively after a rise in the Baltic Dry Index <.BADI>, a
key freight indicator.
Japan's Nikkei index <> gained 2 percent even though
machinery orders' data pointed to weak capital spending in the
world's No. 2 economy.
The MSCI index of Asia Pacific stocks traded outside Japan
<.MIAPJ0000PUS> was up 1.5 percent by mid-afternoon.
In Australia, a sharp fall in employment in August put
pressure on the Aussie dollar <AUD=D4> and dampened
expectations for a rate rise this year.
But share prices gained 1 percent with energy stocks
Woodside Petroleum <WPL.AX> and Santos <STO.AX> rising by 2.3
percent and 3.4 percent respectively off the back of firm oil
prices.
Spot gold <XAU=> held firm at $995.70 per ounce by 0616
GMT, after topping $1,000 on Wednesday.
New Zealand kept interest rates at a record low 2.5 percent
but indicated it was less inclined to cut again. []
However, the kiwi dollar <NZD=D4> fell after Governor Alan
Bollard told Reuters that the currency, which hit a one-year
high on Wednesday, was overvalued and that markets were
premature in pricing in higher rates from early 2010.
"Our view at the moment is that we expect the official cash
rate to be on hold until the latter part of 2010," Bollard
said. []
China's Shanghai index <> recovered early losses and
turned slightly positive but a top planning official said
economic conditions were not ripe enough yet for China to exit
its proactive fiscal policy soon. []
Recent volatility in China's shares has made fund managers
cautious about buying, a Reuters poll shows. []
Hong Kong's Hang Seng Index <> leapt to a one-year
intraday high while Taiwan's benchmark TAIEX index <> hit
a 14-month closing peak after the government named a new
cabinet, raising hopes a financial services agreement with
China can be signed soon.
NYMEX crude <CLc1> rallied for a fourth day running. A U.S.
report on Wednesday showed crude stocks falling much greater
than expected and markets were soothed by OPEC news.
(Additional reporting by Gyles Beckford in Wellington and Seo
Eun-kyung in Seoul; Editing by Neil Fullick)
