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Investors have been reluctant to add positions in emerging markets so far this year, even rotating funds out of high inflation risk economies such as Indonesia and into developed markets such as Japan, on concerns that policy inertia may place authorities behind the curve in fighting price pressures.

The MSCI index of Asia and Pacific shares excluding Japan .MIAPJ0000PUS extended its drop to 0.5 percent, after falling more than 1.8 percent on Wednesday, weighed down by selling in sectors such as materials .MIAPJMT00PUS which in turn have buckled due to a selloff in commodities this week.

"The market's pretty skittish when it comes to the risk of policy tightening," said Pengana Capital portfolio manager Tim Schroeders.

"I think there's some sector rotation out of those better performing materials and energy stocks back into financials."

Commodities took a breather after a sharp selloff this week, though sentiment remained fragile, on concerns that tighter policy may cool growth and sap demand from resource-hungry Asia.

The February contract settled at $89.59 per barrel, after plunging 2.2 percent overnight while three-month copper stabilized after shedding 2.3 percent in the previous session.

Chinese consumer prices in December rose 4.6 percent from a year earlier, staying above forecasts of 4.4 percent and raising concerns of more rate hikes in the near term, Thursday's data showed.

Headline inflation in India accelerated to 8.43 percent in December from a year earlier, compared with 7.48 percent in November and analysts expect a quarter point rate increase at a review next week.

But the broad wave of risk aversion and upbeat U.S. data gave a lift to the dollar, which hit one-week highs versus the yen and the Swiss franc.

The euro, too, held its ground due to combination of factors including successful bond sales from highly indebted countries, including Portugal and Spain, and hopes that officials will agree to beef up a euro zone rescue fund.

Bids from Asian central banks have also helped the single currency all this week, traders said.

Gold steadied after a near two percent drop in the previous session. It paused at $1,346.91 an ounce after sliding to a two-month low of $1,342.65 in the previous session. (Additional reporting by Adrian Bathgate and Ian Chua in SYDNEY; Editing by Ron Popeski)

Page's assumption of day-to-day operations marks a return to Google's technological roots, 13 years after he and fellow Stanford University student Sergey Brin founded what has become the world's No. 1 Internet search engine with $29 billion a year in revenue.

"Day-to-day adult supervision no longer needed!" Schmidt tweeted after the announcement.

The news came as Google reported earnings and revenue that blew past expectations.

While Google has dominated Internet search for a decade, the company has struggled to find its footing in social networking, with a new crop of Web companies such as Facebook and Twitter stealing Web traffic and engineering talent.

"As spending was curbed and order restored over the last few years, some of that Google magic was lost," said Tricia Salinero, managing director of Newforth Partners, a mergers and acquisitions advisory firm, in an email.

Schmidt, who will step aside on April 4 and make way for Page, told Reuters in an interview that the change was "not a reaction to competitors."

Rather, he said, it was an effort to speed up decision making at the company, which ended the year with about 24,000 employees.

"Google has many different businesses and the issue that we have been getting into is there's too many ways (in) which these businesses can be slowed down," Schmidt said.

Schmidt, who became CEO in 2001 to bring more management experience to a then-fledgling company, will assume the role of executive chairman, focusing on deals and government outreach, among other things. Brin will concentrate on strategic projects.

Shares in the Internet search and advertising leader rose about 2 percent to $639 in extended trading.

Just days ago, Apple Inc CEO Steve Jobs announced a leave of absence, leaving lieutenant Tim Cook in charge of day-to-day operations. Like Google, Apple also announced results this week that blew past Wall Street's estimates.

"The Street will think it's a negative, that there is probably some issue going on. Google is trying to get more efficient and trying to get a tech guy in the seat to compete with Facebook," said UBS analyst Brian Pitz. "I don't think it changes anything strategically where the company is headed."

News of the change came as Google reported a 29 percent surge in both net profit and net revenue that beat forecasts.

Net income, excluding items, of $8.75 a share outstripped Wall Street's average forecast of $8.10.

HP's board had for years come under fire from shareholders and business leaders such as Oracle's Larry Ellison, most recently after it forced out Mark Hurd as CEO in controversial fashion.

The new directors will bring fresh thinking to the world's largest technology company by revenue, including much-needed expertise in areas such as telecommunications and international experience, the company said.

In addition to Whitman, HP named as directors Shumeet Banerji, CEO of Booz & Co; Gary Reiner, former chief information officer of General Electric Co; Patricia Russo, former CEO of Alcatel-Lucent; and Dominique Senequier, CEO of AXA Private Equity.

The technology giant said directors Joel Hyatt, John Joyce, Robert Ryan and Lucille Salhany will not stand for reelection by shareholders.

"This change was two things -- the handling of the Mark Hurd situation, which was very controversial, and that with a new CEO it makes sense to have someone new," said Kaufman Bros analyst Shaw Wu.

Hurd was accused last June of sexual harassment by a female contractor, but a board investigation found no evidence to back that up. Hurd resigned August 6 after the board said he filed inaccurate expense reports to conceal a "close personal relationship" with that contractor, something Hurd's representatives have disputed.

The four directors leaving are doing so voluntarily, HP said. Hyatt and Joyce have been directors since 2007, Ryan since 2004, and Salhany since 2002. The changes leave HP with 13 board members.

According to a source familiar with the matter, Salhany and Ryan pushed hard for Hurd's ouster from the outset. Hyatt and Joyce were more supportive of Hurd at first but eventually went along with the unanimous decision to seek his resignation.

NEW BLOOD

Whitman is arguably the best-known of HP's new directors. At eBay, she oversaw a period of robust growth but was criticized for her acquisition of Web telephone company Skype. She recently lost out in a bid to become governor of California.

"With Leo coming in as CEO, we both thought it was appropriate to look at the board," HP Chairman Ray Lane in an interview.

Lane said Russo will bring a strong track record in the telecommunications industry, called Reiner an "iconic CIO," and lauded Banerji's and Senequier's international experience.

Gleacher & Co analyst Brian Marshall said investors should welcome the move.

"To shake it up a little bit and get some of the old-school guys out of there and get some new-school blood in there, highlighted by Meg Whitman, this is a positive development," he said.

Shares in the Internet search and advertising leader rose about 2 percent to $639 in extended trading.

Page, who co-founded Google with Sergey Brin, will take charge of day-to-day operations as chief executive. Schmidt, who became CEO in 2001 to bring more management experience to the young company, will assume the role of executive chairman, focusing on deals and government outreach, among other things. Brin will concentrate on strategic projects.

"Day-to-day adult supervision no longer needed!" Schmidt tweeted after the announcement.

The abrupt shift comes days after Apple Inc CEO Steve Jobs announced a leave of absence, leaving lieutenant Tim Cook in charge of day-to-day operations. Like Google, Apple also announced results this week that blew past Wall Street's estimates.

"The Street will think it's a negative, that there is probably some issue going on. Google is trying to get more efficient and trying to get a tech guy in the seat to compete with Facebook," said UBS analyst Brian Pitz. "I don't think it changes anything strategically where the company is headed."

Google said the management change was made as part of a plan to "streamline" decision making and create clearer lines of responsibility and accountability at the top.

It said Schmidt plans to sell about 534,000 shares of Class A common stock. Based on Google's closing share price of $626.77 on Thursday, he would earn about $334.7 million on the stock sale. He would still own about 2.7 percent of Google's outstanding capital stock, down from 2.9 percent before selling the shares.

"As Google has grown, managing the business has become more complicated. So Larry, Sergey and I have been talking for a long time about how best to simplify our management structure and speed up decision making," Schmidt said in a posting on the company's official blog.

"And over the holidays we decided now was the right moment to make some changes to the way we are structured."

Google also reported fourth-quarter financial results, beating Wall Street's net revenue expectations.

Net revenue, excluding fees paid to partner websites, was $6.37 billion. Analysts polled by Thomson Reuters I/B/E/S, on average, were expecting net revenue of $6.06 billion.

Google posted net income, excluding items, of $8.75 a share, outstripping Wall Street's average forecast of $8.10.

Schmidt said on his blogpost that Page will now lead product development and technology strategy, areas that are "his greatest strengths."

"It will be interesting to see what he'll do that's different, what he could not have done in his prior role," said BGC Partners analyst Colin Gillis.

(Editing by Edwin Chan and Richard Chang)

HP's board had been criticized by analysts, shareholders and other business leaders after it forced out Mark Hurd as CEO in a controversial fashion.

HP said the new directors will bring fresh thinking to the world's largest technology company by revenue, including much-needed expertise in areas such as telecommunications, as well as international experience.

In addition to Whitman, HP named as directors Shumeet Banerji, CEO of Booz & Co; Gary Reiner, former chief information officer of General Electric Co; Patricia Russo, former CEO of Alcatel-Lucent; and Dominique Senequier, CEO of AXA Private Equity.

The technology giant said directors Joel Hyatt, John Joyce, Robert Ryan and Lucille Salhany will not stand for reelection by shareholders.

The four are all leaving voluntarily, HP said. Hyatt and Joyce have been directors since 2007, Ryan since 2004, and Salhany since 2002.

The changes will leave HP with 13 board members.

"With Leo coming in as CEO, we both thought it was appropriate to look at the board," said HP Chairman Ray Lane in an interview.

Gleacher & Co analyst Brian Marshall said investors should welcome the move.

"Net-net I think this is a big positive. To shake it up a little bit and get some of the old-school guys out of there and get some new -school blood in there, highlighted by Meg Whitman, this is a positive development," he said.

Apotheker, the former CEO of SAP AG, took over as chief of HP in November.

"This change was two things -- the handling of the Mark Hurd situation, which was very controversial, and that with a new CEO it makes sense to have someone new," said Kaufman Bros anlayst Shaw Wu.

Hurd's departure in August stunned investors and sent shares tumbling 8 percent in the first trading day after the announcement. Now an Oracle co-president, Hurd left under a cloud of sexual harassment accusations, although the board found no evidence to back up that allegation.

HP instead accused Hurd of filing inaccurate expense reports to conceal a "close personal relationship" with a former contractor, although Hurd's representatives have disputed that.

Shares of Palo Alto, California-based HP were down 4 cents at $46.74 following announcement of the board changes, which came after the stock closed down 0.9 percent at $46.78 on the New York Stock Exchange.

(Reporting by Gabriel Madway; Editing by Steve Orlofsky, Gary Hill)