9:15 PM
Asian stocks rise as dollar bounce pauses
Addison Ray
By Ian Chua
SYDNEY | Wed Oct 27, 2010 10:06pm EDT
SYDNEY (Reuters) - Asian stock markets rose on Thursday, having suffered their biggest one-day fall in four months, as a rebound in the dollar paused after the greenback recovered all of its losses against major currencies this year.
The selloff in commodities also halted with copper, which dropped more than $200 a tonne on Tuesday, its steepest decline since late June, gaining $28 to $8,328 a tonne.
Financial markets have been volatile this week as speculation intensifies over how much the Federal Reserve is likely to spend to pump up a faltering recovery and whether such new measures will be carried out swiftly or phased in over time.
Analysts expect choppy market action to persist in the lead up to the November 2-3 policy-setting meeting.
The latest Reuters survey showed most leading economists expect the Fed to buy between $80 billion and $100 billion worth of assets per month, with estimates for how much it will eventually spend varying from $250 billion to $2 trillion.
In a similar Reuters poll of primary dealers on October 8, dealers mostly forecast the total size of the new program at $500 billion to $1.5 trillion.
Market participants have begun to scale back expectations of the Fed's intentions. The Wall Street Journal said on Wednesday the Fed is likely to unveil an asset-purchase program worth a few hundred billion dollars over several months.
It said officials want to avoid a "shock and awe" approach in their announcement, expected next week. The MSCI index of Asia Pacific stocks outside Japan rose 0.6 percent .MIAPJ0000PUS, having slid nearly 2 percent on Tuesday -- its biggest one-day percentage fall since late June. Still, it remained close to a 28-month high hit last week.
"It's going to remain volatile. If nothing else, markets are a bit overbought short term," said Shane Oliver, head of investment strategy at AMP Capital Investors in Sydney.
Japan's Nikkei stock average .N225, which was spared the selloff seen in the region on Tuesday, slipped 0.1 percent, while Australia's S&P/ASX 200 index .AXJO rose 1.1 percent and Korea's KOSPI .KS11 gained 0.1 percent.
Among the top performers, shares in Canon Inc (7751.T) rallied more than 4 percent, after the world's largest maker of digital cameras posted strong quarterly results and raised its full-year outlook.
"Shares of firms with bullish earnings are being snapped up, but that hasn't spread to similar stocks or sectors as investors are generally more concerned about the implications from today's BOJ meeting and the U.S. Federal Reserve meeting next week," said Mitsuo Shimizu, deputy general manager at Cosmo Securities.
In Australia, upbeat earnings helped drive ANZ shares (ANZ.AX) up 3.2 percent, while bourse operator ASX (ASX.AX) climbed about 2 percent after two days of sharp losses due to uncertainty over Singapore Exchange's (SGXL.SI) $7.9 billion bid.
The MSCI's emerging market stock benchmark .MSCIEF edged up 0.1 percent.
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