* Equity markets mostly firmer across Asia
* China talks tough on fighting inflation
* China econ data lifts global growth hopes, commodities
By Ronald Popeski
SINGAPORE, Dec 14 (Reuters) - Asian stocks advanced on
Tuesday, supported by optimism that China would avoid
aggressive moves to curb inflation that could inhibit its
strong economic growth and blunt its voracious demand for raw
materials.
The euro hovered near three-week highs against the dollar,
with traders citing solid buying from accounts, including
Asian central banks, though year-end trading was thin and
choppy.
A warning from Moody's also weighed on the dollar. The
credit ratings agency said overnight it could move a step
closer to cutting America's triple-A rating if the Obama
administration's deal to extend tax cuts wins Congressional
approval and pushes up the country's already bloated debt
levels.
Metals prices rose after Chinese data released at the
weekend showed buoyant industrial production and fixed asset
investor, pushing copper to record highs and buoying shares of
miners and other resource-related companies.
"Sentiment is decidedly more upbeat now than it was a few
weeks ago," said Austock senior client adviser Michael
Heffernan. "China didn't increase rates, Ireland has settled
down, America has given the tick to the tax bill and there is
no major domestic data out."
Many investors had feared China would raise interest rates
last week to curb mounting inflationary pressures, but the
central bank opted instead to increase the amount of extra
capital top banks must hold. []
An official newspaper on Tuesday said China would probably
target the same level of new loans next year as in 2010, a
further indication that policy could be slightly looser than
expected.
A Reuters poll released on Monday showed economists still
see a rate rise in China in coming months, but expect
policymakers to rely more on lending controls in 2011 as its
weapon of choice in the fight against inflation. []
The MSCI index of Asian stocks outside of Japan
rose 0.4 percent, while the Nikkei was
little changed.
Traders said that if the Nikkei can hold on to its recent
gains, retail investors are likely to jump on the bandwagon and
help it pierce strong technical resistance looming at
10,420.74,
the level where futures and options contracts expiring in
December settled on Friday.
South Korean stocks hit a fresh 37-month high, breaching
the psychologically significant 2,000-point level, fuelled by
gains in key technology issues and the auto sector such as
Hyundai Motors .
Buoyed by optimism about Chinese demand for commodities
and resources, Australian shares edged up 0.2 percent
and stood within 100 points of breaking even for the year,
with some traders optimistic that would be achieved.
In New York on Monday, the broad S&P 500 index
closed flat and the Dow ended just above break-even
amid signs U.S. stocks may be nearing overbought levels, and
on investor caution about staking out new positions heading
into year-end.
MOODY'S WARNING WEIGHS ON DOLLAR
The dollar index was last at 79.357, having plumbed
a three-week low of 79.101 earlier. The euro was at $1.3386,
having risen as high as $1.3433 .
The dollar slid overnight after Moody's said it could move
a step closer to cutting the United States' Aaa rating if
President Barack Obama's tax and unemployment benefit package
becomes law, lifting the likelihood of a negative outlook on
the rating. []
Helped by high copper prices and gains in other metals such
as gold, commodity currencies shone. The Australian dollar
put on nearly 1.5 cents overnight to come close to testing
parity. It was last at $0.9944 .
Oil prices <CLc1> fell 40 cents to $88.21 a barrel ahead
of U.S. Oil industry stock data.
(Ronald.Popeski@ThomsonReuters.com +65 6870 3815)
