Asian shares rise as oil fears ease

HONG KONG: Asian stocks rose on Tuesday with Tokyo performing strongly after a rally on Wall Street and as oil prices stabilised, although the crisis in the Arab world kept gains in check.

Tokyo ended the session up 1.22 percent, or 129.94 points, at 10,754.03 as exporter stocks were boosted by a weaker yen -- a result of dealers moving out of the safe-haven Japanese currency amid renewed risk appetite.

Hong Kong rose 0.25 percent, or 58.40 points, to 23,396.42. Shanghai was 0.47 percent, or 13.72 points, up at 2,918.92 after a top official suggested inflation would fall in February, boosting hopes that further interest rate hikes in the near term can be avoided.

Taipei rose 1.49 percent, or 127.91 points, to end at 8,727.56. Sydney ended lower however after the Australian central bank said it would keep rates on hold at 4.75 percent and forecast inflation within its 2-3 percent target this year, but added that monetary policy would remain mildly restrictive.

The S&P/ASX 200 index fell 0.11 percent, or 5.3 points, to 4,826.40. Seoul was closed for a public holiday.

Traders welcomed Saudi Arabia's commitment on Monday to increase oil production in case of a supply shortfall caused by the unrest across the oil-rich Middle East and North Africa, particularly Libya.


Saudi Arabia, the largest producer in the OPEC oil cartel, said its cabinet had discussed the anti-regime protests in Libya "and their repercussion on oil production in that country".

Saudi Arabia "is committed to the stability of the market" and to ensuring that oil supplies remain available, it said in a statement.

New York's benchmark West Texas Intermediate contract for April delivery rose 44 cents to $97.41 and Brent North Sea crude for April was up 62 cents at $112.42.

While oil prices were up, they remained well short of last week's peaks, when Brent soared close to $120.

Protests that have sprung up across the region from Tunisia and Algeria to Egypt and Oman have now spread to Djibouti and Kuwait, increasing concerns for the region.

However Tokyo's Nikkei index was lifted by a weaker yen as dealers shifted attention to hopes for recovery in the US economy.

The euro held steady against the dollar amid expectations that the European Central Bank is closer to raising its key rate than its US counterpart.

The euro was higher at $1.3819 compared to $1.3803. The unit rose to 113.40 yen from 112.85 yen. The dollar also firmed against the yen, supported by interest rate differentials between the United States and Japan, dealers said.

The dollar traded at 82.14 yen in Tokyo afternoon trading, up from 81.79 yen in New York late Monday.

In China, hopes that rates will not be hiked in the near term were lifted after Zhang Ping, the director of the nation's top economic planning agency, was quoted as saying inflation in February was likely to turn out lower than January's 4.9 percent