* European shares open down
* Euro zone urges Portugal to seek a bailout-FT Deutschland
* Profit taking in consumer stocks weighs on Asia ex Japan
index
* Australia dollar slides after RBA gets dovish
(Adds Europe opening, updates prices)
By Kevin Plumberg
HONG KONG, Nov 26 (Reuters) - The euro fell to a two-month
low on Friday, with Europe's fiscal problems looking more
likely to spread than be solved in the near term, while the
looming year-end kept many equity investors eager to take
profits, weighing on Asian stock markets.
Major European stock markets fell, with the FTSEurofirst
300 opening down 0.5 percent in early trade and
London's FTSE 100 down 0.7 percent . U.S. stock index
futures <SPc1> were down 0.4 percent.
Caution ruled in financial markets, with thinning volumes
and pockets of risk, especially North Korea's sabre rattling
ahead of the South's military exercises with the United States
this weekend, driving more stock investors to take profits on
the year's winning sectors in Asia. []
The Australian dollar slid after the head of the country's
central bank said interest rates were about right for the near
term, extinguishing speculation the currency's yield advantage
would get a policy boost in the next few months.
The MSCI index of Asia Pacific stocks outside Japan fell
1.4 percent , weighed down the most by a 2
percent decline in the consumer discretionary sector.
Powered by the view that the hunger of Asia's consumers
for big-ticket items such as cars and appliances will keep
growing, this sector is up 27 percent so far this year
, making it still by far the best performer.
The benchmark KOSPI index in South Korea fell 1.3 percent
ahead of a tense weekend, with the North threatening
war over joint U.S.-Korean military exercises. []
Japan's Nikkei share average slipped 0.4 percent
on the day, with strength in larger exporter shares offset by
weakness in retailers and industrial stocks.
OUTPERFORMING JAPAN
The Nikkei's 9.1 percent rise in November, driven in part
by a weakening of the yen, is on course to be the biggest
monthly gain since March.
"Recent purchases done by foreign investors are not simply
short covering but I think fresh funds are being poured into
Japanese shares. More follow-through buying could drive up
shares prices further," Nagayuki Yamagishi, a strategist at
Mitsubishi UFJ Morgan Stanley Securities in Tokyo.
Correspondingly, the U.S. dollar's 4.5 percent rise
against the yen is also the steepest single-month advance
since March.
Japanese government bonds, in turn, sold off, with 10-year
futures down 2.6 points in November, the biggest monthly
decline since April 2008.
The December contract was down 0.5 point <2JGBv1> at its
lowest since June 23, ahead of new supply of 10-year debt next
week. The flows across the yield curve have been erratic, and
dealers are keeping watch of cash yields of mid-maturity bonds
to see if they follow the 10-years higher, which would trigger
more bullish bets to be folded.
The U.S. dollar nudged up, though mainly because of
weakness in other currencies.
UNDERPERFORMING EURO
The euro was down 0.7 percent at $1.3262 , as
traders grew tired of waiting for a possible squeeze of bets
against the currency and sold it ahead of the weekend.
"We've been hearing one piece of bad news after another
from the euro zone lately. There's even talk of a breakup of
the euro zone," said Tsutomu Soma, manager of foreign
securities at Okasan Securities in Tokyo.
Many traders were keeping a close watch of Portugal, which
could be next in the firing line among the euro zone's
fiscally vulnerable countries. A majority of euro zone nations
and the European Central Bank are urging Portugal to apply for
a financial bailout from a European rescue fund, Financial
Times Deutschland reported on Friday, without naming its
sources. []
The Australian dollar was down 1.2 percent to US$0.9683
after Reserve Bank of Australia Governor Glenn Stevens
said policy was appropriate for now, suggesting the central
bank was in no hurry to tighten rates.
He later said it was not unreasonable for investors to
price in a rate hike in the middle of 2011, a comfort to
longer-term investors in the Australian dollar but no solace
for short-term bulls who had hoped for a near-term push to
parity. [] []
(Additional reporting by IFR Analyst Takahiro Okamoto in
TOKYO and Reuters FX Analyst Krishna Kumar in SYDNEY)
