Asian shares set for 3rd straight week of gains before US jobs data, STI up 0.8%

Women walk past an electric quotation board flashing share prices of the Tokyo Stock Exchange, on March 3, 2016.
Women walk past an electric quotation board flashing share prices of the Tokyo Stock Exchange, on March 3, 2016. PHOTO: AFP

TOKYO (REUTERS) - Asian shares look set to post a third straight weeks of gains on Friday (March 4) as investors scaled back cautious bets on the global economy after a string of positive US economic data and a recovery in oil and commodity prices.

The rebound in risk asset prices could continue if the upcoming US employment report points to solid job gains, but not strong enough to encourage rate rises in the near term.

The MSCI Asia Pacific Index slipped 0.1 per cent as of 9.37am Tokyo time, as Japan's Nikkei slipped 0.3 per cent.

Singapore's Straits Times Index was up 0.77 per cent at 2,809.10 as of 9.16am.

The Kospi index fell 0.3 per cent as well. Australia's S&P/ASX 200 Index was up 0.3 per cent.

"Globally markets are rolling back the extreme risk-off trading they did in January and February. Part of the reason is that the Fed seems to be easing its insistence on raising rates," said Mr Norihiro Fujito, senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities.

On Thursday, MSCI's world equity index covering 46 markets touched a two-month high.

The rally was led by emerging markets, with a measure of emerging-markets shares rising 1.4 per cent on Thursday for a fifth day of gains, its longest winning streak this year.

The biggest move came from Brazil's Bovespa index, which rose more than 5 per cent, its biggest gain in six years, on news that President Dilma Rousseff could be implicated in a sweeping corruption scandal.

That encouraged investors who blame her administration's policies for driving Brazil in deep recession.

On Wall Street, S&P 500 Index rose 0.35 per cent to a two-month high of 1,993.4.

The US data published on Thursday was positive on the whole, with factory orders rising and the service sector index showing a continued expansion.

Somewhat dimming the optimism, however, the service sector survey showed the employment in the industries fell in February for the first time in two years.

But that was not necessarily bad for US stocks, as it helped to reduce expectations of the Federal Reserve's rate hikes and pushed the US dollar lower.

The dollar's index against a basket of six major currencies stood at 97.656, having slipped 0.6 per cent on Thursday.

The euro jumped back to US$1.0947 from Wednesday's one-month low of US$1.08255.

The yen traded at 113.59 to the dollar, recovering from Wednesday's two-week low of 114.56.

Gold hit a 13-month high of US$1,268.30 per ounce. The Australian dollar stood at US$0.7353, holding firm near a three-month high of US$0.7374 hit on Thursday, helped by rising iron ore prices.

The spot iron ore for immediate delivery to China's Tianjin port hit 4½-month high on Thursday.

Commodity prices have been on the mend, with oil prices recovering more than 30 per cent from January's 12-year lows, helped by hopes of measures to ease global glut.

Brent futures have risen 5.6 per cent so far this week to two-month highs of US$37.40 per barrel while US crude futures have risen 5.9 per cent and last stood at US$34.69.