Asian stocks climb on resources stocks

Wed 26 Mar, 2008 06:45

By Louise Heavens

SINGAPORE (Reuters) - Most Asian share markets rose on Wednesday as resources stocks cheered firmer commodity prices, but the dollar sagged after a drop in U.S. consumer confidence cast doubt on the economy's resilience in the face of a housing and credit slump.

U.S. Treasuries tiptoed higher as investors waited on U.S. data for further signs of the health of the housing market after figures on Tuesday showed consumer confidence hitting a five-year low and house prices falling across much of the country.

European markets were set to open on the back foot, with financial bookmakers in London calling the FTSE 100 down 0.5 percent, Germany's DAX flat, and France's CAC-40 down 0.2 percent.

Metals, mining and oil companies rose, including Japan's Sumitomo Metal Mining, and Australia's Woodside Petroleum, helping some resource-heavy indexes, such as Australia's S&P/ASX 200 notch up a three-week closing high.

"There is a lot of argument that China will continue to drive demand for commodities all the way through this U.S. slowdown. But the slowdown in U.S. housing will probably flow on to U.S. consumers and will no doubt hurt China," said Adnan Kucukalic, equity strategist at Credit Suisse First Boston.

"Demand from China may not be as strong as it was and so it is probably not a very positive story for commodities demand."

U.S. stock index futures pointed to a weaker open later.

On Tuesday, a Conference Board report showed U.S. consumer confidence fell sharply in March, raising concerns Americans are tightening their purse strings.

Japan's Nikkei index -- heavy with exporters, such as Canon Inc -- closed 0.3 percent lower on concerns about weaker demand for its products.

Manufacturers, including television maker LG Display and Hyundai Motor, were also weaker in South Korea, although its benchmark index managed to notch up a 0.3 percent gain.

Singapore's Straits Times was flat and Taiwan fell 0.3 percent.

MSCI's index of Asian shares outside Japan hovered in and out of the red but by 6:13 a.m. was up 0.6 percent. The index is still down about 14 percent this year.

GOLD GLEAMS

A weakening dollar sparked interest in a range of commodities that had been sold off last week. Despite a softer U.S. consumer outlook, analysts gauge that global demand for many commodities remains intact.

Gold extended gains, with spot prices rising to $940.30/941.10 an ounce from $934.60/935.40 late in New York on Tuesday, although prices remain below an all-time high of $1,030.80 on March 17.

U.S. crude oil futures advanced, helped by the falling dollar and weakening supplies, with U.S. crude for May delivery up 58 cents at $101.81.

The dollar traded at 100.19 yen while the euro was changing hands at $1.5603 having risen 1 percent against the dollar on Tuesday.

The dollar had gradually pulled up from record lows against the euro and a 13-year low versus the yen in the past week as investors have hoped the worst of the financial crisis stemming from the United States may be over after the collapse of investment bank Bear Stearns

Japanese government bond futures were flat, with June futures down 0.06 of a point at 140.44.

(Editing by Lincoln Feast)