Asian Shares, Commodities Rise On Stimulus Steps

TOKYO (Reuters) - Assets from Asian shares to oil to gold rose on Friday and the euro steadied as stimulus measures from major central banks continued to buoy investor confidence, offsetting weak economic data.

The MSCI's broadest index of Asia-Pacific shares outside Japan <.miapj0000pus> rose 0.7 percent after slipping to its lowest in nearly a week on Thursday.

Australian shares <.axjo> were up 0.4 percent, with energy stocks picking up on higher oil prices and defensive stocks extending their recent gains. Hong Kong shares <.hsi> were up 0.7 percent.

Tokyo's Nikkei stock average <.n225> added 0.6 percent. <.t/>

"The general consensus at the moment is that any major dips in the market will be supported by the fact that central banks are happy to act," said Stan Shamu, market analyst at IG Markets.

Safe-haven currencies such as the dollar and the yen were slighly pressured, with the yen struggling against the dollar at 78.25 yen while the euro edged up 0.1 percent against the dollar at $1.2978.

Commodities-linked currencies such as the Australian dollar, which is often used to gauge investor risk sentiment, rose 0.4 percent to $1.0470.

"Key global stock indices, while pausing from their rally, generally remain at high levels, suggesting that markets have not entirely turned against risk," Junya Tanase, chief FX strategist at JPMorgan in Tokyo.

"Major central banks pursuing aggressive monetary easing have reduced tail risks for the global economic growth and the euro zone debt crisis, raising the probability for dollar and the yen to weaken and support the cross yen," he said.

Manufacturing reports from the euro zone, China and the United States on Thursday showed factory activity remained lackluster, evidence of sluggish growth globally.

U.S. manufacturing ended its weakest quarter of growth in three years this month and jobless benefits claims held near two-month highs last week, but the Philadelphia Federal Reserve Bank's business index for the U.S. mid-Atlantic region shrank at a lessened pace in September.

Euro zone's manufacturing purchasing managers index showed a slight recovery this month but the downturn in the services sector steepened at the fastest pace since July 2009. China's manufacturing PMI contracted for the 11th month in a row, but some sub indexes showed signs of stabilizing.

CENTRAL BANK LIQUIDITY HELPS

In the past week the U.S. Federal Reserve and the Bank of Japan have launched further monetary easing packages, and the European Central Bank recently outlined a scheme to help cap the borrowing costs of highly indebted euro zone members which request assistance.

"The market retains an attitude of buying risk on the dip. Central bank easing forces investors to take more risk," said Olivier Korber, derivatives strategist at Societe Generale in Paris, in a research note.

"The period between euphoria and economic rebound is typically one with range bound periods, where the market hunts for weak hands."

With central banks around the world keeping markets awash with funds, gold looked set to benefit from investors seeking a hedge against future inflationary risks.

Spot gold was up 0.3 percent at $1,772.21 an ounce, nearing its highest since February 29 of $1,779.10 hit on Wednesday.

Over the past 30 days, gold futures open interest has gained about 25 percent to a one-year high as of wednesday while prices have risen nearly $200, or 10 percent, in the past four weeks.

U.S. crude climbed 0.8 percent to $93.11 a barrel on concerns over instability in the Middle East and a refinery shutdown in Venezuela, while Brent rose 0.4 percent to $110.50.

Asian credit markets firmed slightly, narrowing the spread on the iTraxx Asia ex-Japan investment-grade index by 2 basis points.

Spain, which had been the main source of market jitters with its borrowing costs surging on worries about its refinancing ability and led to the ECB's bond-buying plan, raised funds above its target at Thursday's auctions.

But Madrid faces a refinancing of 27.5 billion euros in October and need additional 10 billion euros to offset the fallout from austerity measures.

Greece continues its struggle to secure approval of restructuring plans from its global creditors in exchange for a bailout to keep the country solvent.

(Additional reporting by Thuy Ong in Sydney; Editing by Daniel Magnowski & Kim Coghill)

(chikako.mogi@thomsonreuters.com; +813 6441 1871 Reuters Messaging: chikako.mogi.thomsonreuters.com@reuters.net)

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