Asian shares creep higher, wary of China credit strains

Sun Dec 22, 2013 6:26pm EST
 
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By Wayne Cole

SYDNEY (Reuters) - Asian markets inched cautiously higher on Monday encouraged by record highs for Wall Street, though anxiety over a credit squeeze in China has weighed on shares there while adding to pressure on emerging market currencies.

Volumes were very light with Tokyo on holiday on Monday and Christmas almost here. Australia's main index .AXJO added 0.3 percent while S&P 500 futures gained 0.25 percent.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was a fraction firmer.

Sentiment should be underpinned by upbeat data on U.S. economic growth and the resilience of stocks to the Federal Reserve's decision to start scaling back its bond-buying stimulus.

On Wall Street, the Dow Jones .DJI ended Friday up 0.26 percent, while the S&P 500 Index .SPX added 0.48 percent. Europe's broad FTSEurofirst 300 index .FTEU3 rose 0.45 percent.

The dollar was idling at 104.03 yen on Monday after scoring a fresh 5-year high at 104.64 last week. Dealers cited option barriers at 104.75 and 105.00 as the next target for bulls.

The euro was steady at $1.3674, but well short of last week's $1.3811 peak. The single currency was only briefly troubled on Friday when Standard & Poor's cut its supranational long-term rating on the European Union to AA-plus from AAA, citing rising tensions on budget negotiations.

Yields on benchmark 10-year Treasuries were holding at 2.89 percent having risen just 2 basis points last week even as the Fed announced its tapering.   Continued...

 
Traders work on the floor of the New York Stock Exchange shortly after the market opening December 19, 2013. REUTERS/Lucas Jackson