Asia shares gain as gold hits record high
Dollar at 7-week low against yen as market expects interest rates to remain low
Hong Kong/Seoul: Asian stocks rose on Wednesday after the Federal Reserve raised US growth forecasts for 2010, while gold struck a record high on a weaker dollar and a media report said India was "open to buying" more of the precious metal.
European shares were seen rising on the improved prospects for the US economy and US S&P 500 futures were up 0.3 per cent.
The dollar fell to its lowest in seven weeks against the yen and remained under pressure against other major currencies on a combination of factors including expectations that US interest rates will remain low for some time.
Spot gold, which has risen 13 per cent this month, held above $1,177.4 (Dh4324.5) per ounce after hitting a high of $1,178.3 on a weakening dollar and India's Financial Chronicle newspaper report.
"The India report has certainly helped to push the momentum in the market..." Darren Heathcote, head of trading at Investec Australia, said.
Asian stock markets held firm, with the MSCI index of Asia Pacific stocks traded outside Japan rising 0.81 per cent. The Thomson Reuters index of regional shares was up 1.29 per cent.
Rebound
Tokyo's benchmark Nikkei average turned higher after sliding to a four-month intraday low, but the outlook remained murky on doubts about the health of the world's second-largest economy.
As confidence in Japan's economy wanes, financial markets have been reflecting some of that concern with the stock market trailing the rest of the region significantly these past few weeks.
"There is uncertainty about the outlook for corporate revenue in an appreciating yen environment," Toshiro Muto, chairman of the Daiwa Institute of Research and former deputy Bank of Japan governor, said.
"There is an observation that Japanese banks are strengthening capital procurement. And although not the main reason, changes in the Japanese government have created uncertainty about Japanese policies," he added.
Pension funds have been cutting stock holdings and increasing exposure to foreign holdings to diversify and rebalance their investments.
