Asian stocks rise as gold holds gains, US dollar maintains advance

WELLINGTON (Bloomberg) - Asian stocks climbed, while the U.S. dollar regained some momentum on signs U.S. inflation is perking up. Gold was near a more than two-week high and bonds advanced.

The MSCI Asia Pacific Index added 0.2 per cent by 9:56 a.m. in Tokyo, rising for the sixth time in seven days as Japan's Topix index also climbed 0.2 perc ent. Standard & Poor's 500 Index futures were little changed after a second day of declines in the U.S. gauge.

The Bloomberg Dollar Spot Index was up 0.1 per cent as the greenback held its rebound against the euro and gained 0.2 per cent versus New Zealand's currency. Gold held its five-day rally and Australian debt climbed. U.S. oil was at US$47.56 a barrel before an update on U.S. crude supplies.

The cost of living in the U.S. climbed 0.2 per cent in February from the previous month as fuel costs stabilized. The data came almost a week after the Federal Reserve said it's looking for inflation to accelerate as officials weigh the timing of their first interest-rate increase since 2006. Australia's central bank issues its financial stability report Wednesday, and Germany's Ifo Institute business climate index is due. Data on durable goods orders is scheduled in the U.S.

"Traders love a good pullback and as soon as the dollar looks like it's setting up to resume its bullish trend currency traders will flood the market with trades," said Scott Schuberg, chief executive officer of Rivkin Securities Ltd. in Sydney. "We could see continued volatility in foreign-exchange markets."

The dollar index, which tracks the greenback against 10 major peers, rose for a second day after sliding 2.2 per cent last week as the Fed indicated it will raise rates at a slower pace than previously estimated.

The euro was little changed at US$1.0919 after losing 0.2 per cent Tuesday. The Malaysian ringgit dropped 0.3 per cent after strengthening more than 1 per cent on each of the past two trading days.

Australia's S&P/ASX 200 Index also rose, adding 0.2 per cent with the Kospi index in Seoul.

China Rally Futures on the FTSE China A50 Index traded in Singapore jumped 1 per cent in most recent trading.

The Shanghai Composite Index capped its longest rally since May 1992 on Tuesday, rising for a 10th day as investors bet weaker-than-estimated Chinese manufacturing data will spur more monetary stimulus. The HSBC/ Markit Economics China Purchasing Managers' Index fell to an 11-month low, preliminary data Tuesday showed.

Gold for immediate delivery was little changed at US$1,191.70 an ounce after touching US$1,195.16 Tuesday, its highest intraday level since March 6. The prospect U.S. policy makers will hold off on raising rates until later this year has fueled the precious metal's 3.8 per cent advance since March 18.

Government bonds from Australia to Singapore followed Tuesday's Treasury gains after a US$26 billion sale in the U.S. of two-year notes was characterized as good by firms obligated to bid.

West Texas Intermediate crude was little changed for a second day. U.S. crude stockpiles expanded for an 11th week through March 20, a Bloomberg News survey showed before a report from the Energy Information Administration Wednesday. Saudi Arabia, the world's biggest exporter, is pumping about 10 million barrels a day, close to the record amount produced in 2013.