11:09 PM
By Koh Gui Qing
SYDNEY | Mon Nov 22, 2010 12:37am EST
SYDNEY (Reuters) - The euro, Asian stocks and commodities jumped in a relief rally on Monday after global financial authorities agreed to save debt-swamped Ireland and protect Europe's wider financial stability.
An agreement from the EU and the IMF to lend Ireland cash to tackle its banking and budget crisis gave investors a reason to buy back some of the assets sold off earlier this month.
But gains were moderate suggesting investors remained cautious, in part because they did not want to risk year-to-date profits, with Europe still saddled with fiscal troublespots such as Portugal and Spain.
"There are still a lot of issues in Europe," said Alex Boggis, who heads fund manager Aberdeen's business in Hong Kong. Aberdeen manages around $15 billion in Hong Kong and China.
"The focus of attention will move around Europe until there are no problems left but that might be some time, so there's going to be volatility for sure."
At the heart of the euro zone's debt woes is investor anxiety about whether the bloc will continue to rescue its fiscally troubled members.
It has already spent 110 euros saving Greece, and Ireland's bail-out is expected to cost about 80-90 billion euros.
Still, the Irish bail-out brought some cheer and helped the euro to climb as far as $1.3766, from $1.3683 late in New York on Friday. It now faces resistance at $1.3770.
The softer U.S. dollar .DXY benefitted commodity and metal prices. Copper was firm and oil rose to above $82 a barrel <O/R>. Spot gold added $6.60 to $1,360.75 an ounce, up from $1,353.50 in New York on Friday.
Other riskier assets also got a boost at the margins.
The Asia-Pacific MSCI index of shares outside Japan added 0.7 percent. But it appeared stock investors were more keen to buy laggards rather than pile into the year's star performers.
Between sectors, the information technology sector .MIAPJIT00PUS led gains with a 2 percent rise. But on the year, it has fared the worse with just a 3.4 percent gain, way behind a 31 percent jump in consumer discretionary stocks.
It was the same between countries. Japan's Nikkei .N225, which has straggled other Asian stock markets this year, hit five-month highs and was up the most on the day with a 1.2 percent climb.
China's Shanghai stock index .SSEC, another laggard within Asia, managed to reverse an initial 0.9 percent loss to be up 0.5 percent by mid-day.
The excitement around Ireland seemed to have overshadowed for now China's policy tightening on Friday when it raised banks' required reserves ratio to a record high.
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