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 MSCI's broadest index of Asia-Pacific shares outside Japan
<.MIAPJ0000PUS> rose 0.8 percent to its highest level since March 11
while Japan's Nikkei <.N225> ticked up 0.1 percent.
U.S. consumer confidence rose more than expected in March, climbing
to its highest level since January 2008 and U.S. house prices
increased solidly in January.
The reports were the latest in a string of positive reads on the
U.S. economy, adding more credence to the view that softness earlier
this year was related to inclement weather and not economic
weakness.
The upbeat data helped Wall Street shares rebound after a two-day
decline, with the Standard & Poor's 500 Index <.SPX> gaining 0.4
percent.
Mainland Chinese shares <.SSEC> also held firm near one-month high,
even as rumor of insolvency led to a run on small banks.
Hit by a spate of negative news in recent weeks, including the
Ukraine crisis and slowing growth in China, investors appear to be
holding on to hopes that Beijing will take steps to bolster its
sagging economy.
"Ongoing reaction to the possibility that China will soon move to
implement economic stimulus may be the key to today's trading," Ric
Spooner, chief market analyst at CMC Markets in Sydney, said in a
note to clients.
However, "stimulus initiatives are likely to be much more modest and
less infrastructure and commodity focused than previously," he said.
The China stimulus expectations underpinned not only Chinese shares
but many markets leveraged to the Asian giant, including Brazil,
Australia as well as a host of commodities.
London copper futures rose to a two-week high of $6,623.75 per tonne
on Tuesday, while other commodities that had been battered earlier
this month — ranging from iron ore and steel — also rebounded from
their lows.
The Australian dollar hit four-month high of $0.9175 on Tuesday and
last stood at $0.9159.
Other major currencies were stuck in well-worn ranges, with the euro
fetching $1.3816 and the yen changing hands at 102.32 yen to the
dollar.
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Appetite for risk was also supported by easing geopolitical tensions
over Ukraine after a meeting of Western leaders ended with little
more than fist-shaking at Russia. U.S. President Barack Obama and
his allies agreed to hold off on more damaging economic sanctions
unless Moscow goes beyond the seizure of Crimea.
The news that Moscow's and Kiev's foreign ministers had held an
impromptu first meeting also led investors to believe the crisis
triggered by Russia's annexation of Crimea is not heading into a
wider armed conflict.
"The markets were worried that Russia might invade the southern or
eastern part of Ukraine after Crimea. But the chances of that
happening seems to be slim now, reducing investors' risk aversion,"
said Kyosuke Suzuki, director of forex at Societe Generale.
Investor relief was palpable in Russia, where the ruble firmed to
pre-Crimea crisis levels.
The ruble rose about 1.5 percent on Tuesday against the dollar-euro
basket, its biggest gain in 1-1/2 years, to 41.68 to the basket,
hitting a one-month high.
The MSCI emerging equities index <.MSCIEF> also rose to a two-week
high, with Brazilian shares <.BVSP> tapping five-week highs despite
a downgrade of Brazil's credit rating by U.S. rating firm Standard &
Poor's.
Meanwhile, precious metals lost some of their allure as concerns
over Ukraine ease and as U.S. short-term rates have risen.
Gold hit a five-week low of $1,305.59 per once on Tuesday and last
stood at $1,313.20 while silver dropped to seven-week low of $19.78
per ounce.
(Editing by Shri Navaratnam)
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