Asian shares advance; momentum seen waning

By Rafael Nam
HONG KONG (Reuters) - Asian shares marched toward new highs for the year on Friday as stronger-than-expected Chinese industrial output data and a rise in U.S. retail sales fueled hopes that the worst was over for the global economy.
The safe-haven dollar was largely unchanged after Thursday's falls, but oil prices slipped below $73 following a three-day rally that brought levels to their highest since mid-October.
The strong shift toward riskier assets over the past few months has been anchored by the improving global economic prospects, especially in the United States and China.
The momentum of that shift is slowing though, and wary investors will need more evidence of an actual recovery in the global economy, analysts said.
"The market probably ran a bit too hard over the past two weeks. Consumer sentiment has improved but some of the economic challenges still remain," said Lucinda Chan, division director with Macquarie Equities in Australia.
The MSCI index of Asia-Pacific stocks outside Japan .MIAPJ0000PUS rose 0.6 percent as of 0240 GMT, just under a 2009 high hit last week that was its best level since late September.
The index has surged some 66 percent from its March bear market low, but struggled over the last two weeks as investors worried demand was still too weak and feared higher borrowing costs for consumers and businesses may hold back a U.S. recovery.
Japan's Nikkei average .N225 rose 1 percent after powering to its highest level since Oct 7, taking its gains to more than 40 percent since early March.
The levels indicate in part a return to normalcy nine months after the collapse of Lehman Brothers in mid-September sent global financial markets into a nosedive.
Data on Friday showed China's annual industrial output growth rebounded by a stronger-than-expected 8.9 percent in May, in line with Chinese media articles on Wednesday that had reported the data ahead of the official release.
The improving prospects for China comes as reports on Thursday showed U.S. retail sales rose in May for the first time in three months, while the number of workers filing new claims for jobless benefits last week fell to the lowest level since January.
A fall in benchmark U.S. Treasury yields following a well-received auction of 30-year notes also helped support broader sentiment, easing concerns about rising borrowing costs. Interest rates on many loans and mortgages are benchmarked to government bond yields.
Hong Kong's main index .HSI advanced more than 1 percent, but gains were smaller in Shanghai .SSEC, as well as in South Korea and Australia .AXJO.
Among individual gainers, OZ Minerals (OZL.AX) surged 13.5 percent in its resumption of trade after shareholders of the debt-laden miner on Thursday approved a sale of most of the company's assets to China's state-owned MinMetals for about $1.4 billion.
But some of the gains in resources shares over the past couple of sessions that had fueled gains in Asian shares faltered along with the decline in oil prices. Continued...
Source: Reuters