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Asian shares hit 1-month low, euro steady before Bernanke speec

  • TOKYO: Asian shares hit a one-month low on growth concerns while major currencies were range-bound on Thursday as investors waited to see whether US Federal Reserve Chairman Ben Bernanke will give any hint about further US stimulus in a speech on Friday.

    Markets sensitive to industrial demand, such as iron ore, were pressured by the slowdown in the Chinese economy, while the decline in dollar-based commodities and energy prices also reflected investors toning down elevated expectations for further US monetary easing next month.

    Data on Wednesday showing solid US pending home sales while the Fed said in its Beige Book that nationwide business activity grew gradually in July and early August, pinning the Standard & Poor's 500 Index near a four-year high and the dollar in familiar levels against the yen around 78.61.

    "Central banks' accommodative stance is the most significant factor for markets, so investors will be increasingly reluctant to take positions and be sensitive to swings in the dollar in the run-up to Jackson Hole," said Naohiro Niimura, a partner at Tokyo-based research and consulting firm Market Risk Advisory.

    Bernanke will speak on Friday at the Jackson Hole meeting of central bankers and economists, an event he has used in the previous two years to signal the Fed's easy policy intentions.

    "Receding expecations for an imminent Fed easing weighed on dollar-based commodities while concerns about weak demand from the world's largest consumer China hit commodities such as iron ore, which are driven more by fundamentals than speculators."

    MSCI's broadest index of Asia-Pacific shares outside Japan shed 0.9 percent to a four-week low, pulled down by a 2 percent plunge in its materials sector. Japan's Nikkei stock average slid 0.7 percent.

    Australian shares tumbled 1.2 percent to a two-week low as miners extended losses on falling iron ore prices, which hit their lowest levels since late 2009. Rio Tinto fell below A$50 a share for the first time in over three years. The ore is Australia's single biggest export earner.

    The Australian dollar fell to a one-month low around $1.0320 .

    "We are seeing a mining industry in a state of flux," Boart Longyear Chief Executive Craig Kipp said.

    "Global uncertainties ... are driving our mining customers to be more cautious with their capital," he said.

    Hong Kong shares tumbled 1 percent ahead of a futures settlement at the end of Thursday trade, with the decline accelerating after stop losses were triggered at the 19,700 level when the index opened below the 200-day moving average.

    Shanghai shares rebounded from their lowest close since Feb. 2009 on Wednesday.

    Despite sounding out primary dealers on potential demand for 28-day reverse repurchase agreements on Wednesday, China's central bank on Thursday opted against using the unconventional money market tool, widely seen as a compromise between short-term liquidity injections and a cut in bank reserve requirement ratios.

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