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Asian shares edge up but growth fears propel gold

Aug 23, 2011 3:19:22 PM - www.ft.lk

SINGAPORE (Reuters): Asian shares edged up on Tuesday after modest gains on Wall Street, but remained deep in negative territory for the month, while gold hit another record above $1,900 an ounce as investors continued to fret about the health of the global economy.

 The euro was under pressure as traders awaited flash purchasing managers’ index (PMI) data on Tuesday for Germany, France and the euro zone, with a weak number likely to exacerbate fears about the cost of bailing out the bloc’s indebted peripheral states.
 Before that, HSBC will release its flash PMI survey for
China, which should help investors gauge the strength of Chinese manufacturing, the motor of global growth in recent years.
 World stocks have been tumbling since the beginning of  August — and perceived safe havens such as gold and U.S.
Treasuries have rallied — on fears of a slide back into recession for the United States and growing concerns that Europe’s politicians are failing to contain its sovereign debt crisis.
 “We are not hearing much good news out of Europe or the United States,” said Darren Heathcote, head of trading at Investec Australia.
 Japan’s Nikkei share average rose 0.7 percent on Tuesday, as did while MSCI’s broadest index of Asia Pacific shares outside Japan .
 The MSCI index is down around 15 percent for the month, and nearly 20 percent below its April high. A decline of 20 percent or more is the rule-of-thumb definition of a bear market.
 Bargain hunters pushed U.S. stocks slightly higher on Monday after four weeks of losses, with the Dow Jones industrial average gaining 0.3 percent.
 Spot gold soared to the latest in a succession of all-time highs above $1,900 an ounce and was on course for its biggest monthly rise in 29 years. U.S. crude oil was virtually unchanged around $84.40 a barrel.
 The euro traded around $1.4365 , having retreated from
 Monday’s high around $1.4434.
 The softer euro helped the dollar index , which tracks the U.S. currency’s performance against a basket of major currencies, bounce off Monday’s low of 73.814 to 74.126.
 Worries about more action from Swiss and Japanese authorities to weaken their currencies also helped underpin the dollar index.
 Against the yen, the dollar was at 76.82 yen , off a record low around 75.94 set last Friday. The Swiss franc traded at 0.7900 francs , having carved out a slim trading band between 0.7800 and 0.8000.

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