Asia stocks dip, quarter-end spurs profit-takers

By Eric Burroughs
HONG KONG (Reuters) - Japanese shares fell and other equity markets struggled on Thursday, with some investors booking profits in the last days of the second quarter after big gains scored on signs the global economy is starting to recover.
Asian stocks outside Japan are up nearly 30 percent so far in the April-June quarter and poised for their biggest quarterly gain in 16 years, led by a surge in Hong Kong's Hang Seng .HSI and bank stocks such as heavyweight HSBC (0005.HK).
Analysts remain divided about whether consumer spending in major economies will kick in later this year and help fuel the pick up in growth.
But the renewed confidence among portfolio managers has emboldened them to scoop up shares battered by the crisis last year as hedge funds were forced to dump assets and the global economy skidded into its deepest recession in decades.
A monthly poll from Bank of America-Merrill Lynch showed global fund managers have moved to overweight stocks for the first time since December 2007, during the early stages of the crisis that began nearly two years ago.
The poll also found global growth expectations reaching their highest level in six years.
Japan's Nikkei average .N225 shed 1.8 percent. But for the April-June quarter, the first of Japan's business year, the Nikkei is still up 19 percent, what would be its largest quarterly rise since 1995.
"It seems like a pull-back phase. People who want to take profits are starting to appear," said Koichi Ogawa, chief portfolio manager at Daiwa SB Investments in Tokyo.
The MSCI index of Asia-Pacific shares outside Japan .MIAPJ0000PUS dipped 0.2 percent. A 0.2 percent gain in the Taiwan Weighted index was offset by a 1.6 percent drop in the Hang Seng.
For the quarter, the MSCI index has jumped 29 percent, what would be its biggest quarterly rise since the October-December period in 1993.
"The global economy will continue to heal itself, albeit at a gradual pace. The current sell-off in risky assets is inconsistent with the gradually improving economic fundamentals," said Stephen Jen, managing director of macroeconomics and currencies at BlueGold Capital Management, a London-based hedge fund.
DOLLAR STEADIES
The dollar was little changed and continued to suffer from the rebound in riskier assets and commodity prices that has prompted market players to favor higher-yielding currencies tied to the global economy, such as the Australian dollar.
Doubts about the dollar's status as a reserve currency have also hurt the greenback.
But leaders from the major emerging economies of Brazil, Russia, India, China and South Africa refrained from mentioning the dollar's reserve role in the communique of their inaugural summit this week, even as Russia pushed the issue. Continued...
Source: Reuters