* Asia stocks up 1.7 pct, bounce back from sharp drop
* Aussie slips on profit-taking after sharp rebound
* Upbeat earnings from Samsung Electronics, ICBC give boost
By Eric Burroughs
HONG KONG, Oct 30 (Reuters) - Asian stocks bounced back on
Friday from their worst drop in two months after the United
States pulled out of its worst slump since the Great
Depression, which suggested that momentum of the global
recovery is picking up.
The MSCI index of Asia-Pacific shares outside Japan
<.MIAPJ0000PUS> rose 1.7 percent after a tumble of 2.4 percent
on Thursday, the biggest since August when plunging Chinese
shares hit markets across Asia.
For October, the MSCI was up just half a percent as this
year's 60 percent surge has petered out, partly as some
investors have booked profits on the the big gains and fretted
about historically steep valuations.
But analysts and portfolio managers said Asian shares would
remain in favour, even with occasional pull-backs, as investors
prefer Asia's strong growth powered by China's economy.
Data on Friday showed South Korean industrial output
expanded at a faster-than-expected 5.4 percent in September and
factories using the most capacity since June 2008 --
reinforcing expectations the Bank of Korea will start raising
rates.
Despite some mid-week selling, foreign investors also kept
buying emerging market shares even while shedding stocks in the
United States and Japan. Asia ex-Japan equity funds received
$433 million in the week ending Wednesday, nearly a third of
all the money going to emerging markets, according to EPFR
Global.
Analysts at Deutsche Bank said in a note to clients that
Asia ex-Japan shares were enjoying conditions "ripe for further
upside and global outperformance," citing earnings momentum,
loose monetary policy and investors globally holding lots of
cash.
Commodities recovered along with stocks. Crude oil <CLc1>
prices held near $80 a barrel and a one-year peak struck last
week. But the Australian dollar, the major currency offering
the highest yield, slipped as some market players booked
profits on its 2 percent surge -- the biggest since June.
Analysts said the 3.5 percent annualised growth in the
United States during the third quarter, pulling the economy out
of its worst recession since the Great Depression, pointed to
further growth thanks to expected corporate inventory
rebuilding and government spending. []
"The GDP number was supportive of a better economic growth
environment. The higher-risk stocks are finding more support,"
said RBS Australia head of distribution Leigh Gardner. "The
growth trajectory in North America and in Australia is
supportive of markets going higher."
Traders said the slide in shares and higher-yielding
currencies the previous day was caused in part by hedge funds
pulling out funds from winning bets this year as many in the
United States are closing their books for the year next month.
Japan's Nikkei average <> climbed 1.5 percent but shed
1 percent during the month.
HOPES FOR QUICK REVIVAL
The U.S. GDP figures helped relieve some investor worries
that the global recovery was losing momentum, which had
prompted some to take profits on this year's equity market
surge as government stimulus and interventions helped revive
growth more quickly than expected.
South Korea's Samsung Electronics <005930.KS>, a bellwether
for Asian technology companies and the world's top maker of
memory chips and LCD screens, reported its best-ever quarterly
profit and forecast a strong 2010. []
Samsung's shares were up 0.7 percent, outpacing the 0.3
percent dip in Seoul's benchmark KOSPI index <>.
Shares in Hong Kong were the strongest in Asia. The Hang
Seng <> jumped 3 percent, with Industrial and Commercial
Bank of China (ICBC) the biggest contributor as it gained 4.3
percent after a 19 percent rise in quarterly profit.
[]
Across the border in Shenzhen, Chinese investors flocked to
the new start-up ChiNext market <0#CHINEXT.SZ> on its first day
of trade. All 28 shares in the market more than doubled on
their debut, a speculative surge that also suggested that
upcoming share listings would meet strong demand.
[]
The dollar was steady after having lost ground the previous
day on the hefty gains in higher-yielding currencies, while the
yen pushed higher as Japanese investors sold higher-yielding
currencies before month-end.
The dollar index, a gauge of its performance against a
basket of six leading currencies, was flat at 75.919. The euro
was also flat at $1.4830 <EUR=>, while the dollar dipped 0.5
percent to 91.00 yen <JPY=>.
The Aussie slipped 0.1 percent to $0.9150 <AUD=D4> and
holding below a 14-month peak of $0.9330. Against the yen, the
Aussie shed 0.7 percent.
Government bonds in Japan and South Korea were little
changed on the day.
(Additional reporting by Victoria Thieberger in Melbourne;
Editing by Jan Dahinten)
