(Updates prices, adds European opening, Taiwan 5-month high)
By Tom Miles
HONG KONG, April 15 (Reuters) - Investors jostled for
position on Tuesday as stock markets braced for a slew of
earnings from U.S. banks, with some heading for the refuge of
bonds and gold and others betting that the worst is already
priced in.
Oil prices hit a record peak above $112 a barrel, helped by
a dollar which has retreated from highs made after supportive
remarks from the Group of Seven nations at the weekend.
The dollar dithered in a narrow range in cautious Asian
trade and stood at 101.18 yen <JPY=> by 0607 GMT, while the
euro traded at $1.5833 <EUR=>, barely changed on the day.
"The broad weak dollar trend hasn't changed, and the market
is returning to economic data and earnings results this week
for clues, with the bias towards dollar selling," said a senior
dealer at an European bank in Tokyo.
The week should be littered with clues since U.S. banks are
due to unveil their latest quarterly results, which could
reveal more problems related to U.S. subprime mortgages.
The tone was set on Monday by Wachovia Corp <WB.N>, the No.
4 U.S. bank, which posted a surprise first-quarter loss,
prompting it to raise $7 billion of capital, slash its dividend
and cut jobs []. For a preview of other U.S. bank
earnings, please click on []
"After the news about Wachovia, investors couldn't actively
buy financials, but they now appear somewhat willing to buy on
dips as they are factoring in weak results from the sector,"
said Zenshiro Mizuno, a senior managing director of the equity
trading division at Marusan Securities in Japan.
"Still, trade will likely be quiet as investors want to see
results from banks such as Citigroup."
MODEST REBOUND
Shares made rebounded modestly from steep falls on Monday.
Financial bookmakers, or spread betters, in London expected
Britain's FTSE 100 <>, the German DAX <> and the
French CAC 40 <> to open as much as 0.5 percent higher.
Japan's Nikkei average <> clawed back almost 0.6
percent after falling 3 percent on Monday, while MSCI's measure
of other Asia Pacific stocks <.MIAPJ0000PUS> was up 0.4
percent.
One market participant in Japan said investors were
returning to blue-chips such as Takeda Pharmaceutical Co Ltd
<4502.T> and Toyota Motor Corp <7203.T>, which rose 1 percent
after striking a year low on Monday.
Amid the gloom and nerves, Taiwan's main TAIEX index
<> rose 0.4 percent to a 5-month high after the central
bank gave initial details of its plans for convertability
between the Taiwan dollar and China's yuan, spurring on
financial stocks such as Cathay Financial <2282.TW>.
Australia's benchmark S&P/ASX 200 index <> rose 1.1
percent as resources firms rose on strong oil and metals
prices.
Dollar-denominated oil prices hit record highs, helped by
weather problems in Mexico that will restrict supplies.
U.S. light crude for May delivery <CLc1> hit $112.48 a
barrel, beating its previous record by 27 cents, before
retreating to $112.26. London Brent crude <LCOc1> rose 61 cents
to $110.45 a barrel, surpassing Monday's $110.01 high.
Gold <XAU=>, a safe-haven asset that often tracks oil's
gains, inched up to $929.10/0.10 an ounce as investors weighed
up the chances of the months of selling in equities continuing.
"Market participants are still very much on the long side.
We need to see fresh buying from the funds to bid gold up to
above $940," said William Kwan, a dealer at Phillip Futures in
Singapore.
Like equity markets, bond investors were cautious ahead of
a potentially rollercoaster U.S. earnings season, and Japanese
government bonds backtracked slightly from Monday's gains and
prices fell in anticipation of a 600 billion yen ($5.9 billion)
auction of 30-year bonds later in the session.
June 10-year futures <2JGBv1> were 0.27 points lower at
139.63, having earlier slid towards a one-month low of 139.13
struck last week.
(Additional reporting by Geraldine Chua in SYDNEY, Annika
Breidthardt and Lewa Pardomuan in SINGAPORE, Aiko Hayashi and
Chikako Mogi in TOKYO; Editing by Lincoln Feast)
