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Asian stocks shake off Wall Street shadow, dollar gains

Tokyo, January 17, 2014

The dollar pushed higher on Friday and Asian stocks clawed their way off session lows, moving past downbeat results on Wall Street as some investors wagered that upcoming US data will paint an optimistic picture of the world's largest economy.

The dollar index, which tracks the greenback against a basket of six major currencies, held its ground on the day, adding 0.1 per cent at 80.949.

The dollar was flat on the day against the yen at 104.34 yen, though it held well off a four-week low of 102.85 set on Monday. Against the euro, the dollar edged up to $1.3615.

"European markets should open on a flat to positive footing, with plenty for traders to focus on," said IG chief market strategist Chris Weston.

The batch of data due later in the session include December U.S. housing starts, building permits, industrial production and the University of Michigan sentiment index.

MSCI's broadest index of Asia-Pacific shares outside Japan slumped 0.2 percent, while Australian shares skidded 0.4 percent and Japan's Nikkei index dropped 0.8 percent.

"U.S. companies whose earnings have a big impact on the global economy disappointed the market, so it is triggering selling," said Norihiro Fujito, a senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities.

He added that investors were reducing their positions before a three-day weekend in the United States, where markets are closed on Monday for a public holiday.

On Thursday, the Standard & Poor's 500 backed away from a record high struck in the previous session, after disappointing earnings from banks including Goldman Sachs and Citigroup, though some noted that the broader impact was limited.

"The market has not made much of the news with regard to global growth, though, as oil prices remained broadly unchanged and non-financial stocks broadly outperformed," strategists at Barclays said in a note to clients.

US crude futures rose about 0.1 percent to $94.07 a barrel, not far from a two-week peak of $94.64 reached earlier this week after U.S. government data showed a larger-than-expected drop in inventories.

Gold was steady in early trade on Friday, slightly higher at $1,243.60 an ounce, after U.S. data showed more strength.

Markets were caught off-guard a week ago when payroll numbers showed U.S. jobs growth unexpectedly weakened. But subsequent upbeat data, including robust consumer spending, dispelled some of concerns.

Thursday's U.S. data showed consumer prices rose the most in six months in December, in line with expectations, and the number of Americans filing new claims for unemployment benefits fell for a second week last week. But the Philadelphia Fed's index of business conditions in the U.S. Mid-Atlantic region fell to its lowest level since April.

Meanwhile, the Australian dollar slumped 0.2 percent to $0.8806, after it shed more than 1 percent on Thursday to $0.8777 -- a low not seen since August 2010. Traders said good buying interest below 88 U.S. cents should provide some support for now.

The Aussie plunged after news Australia's economy shed 22,600 jobs in December, when economists had expected a small increase.-Reuters




Tags: Wall Street | Asia stocks |

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