Reuters: Most Read Articles: Asian shares, euro pressured by growth worries, Cyprus

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Asian shares, euro pressured by growth worries, Cyprus Mar 22nd 2013, 04:14 1 of 7. Visitors cast their shadows on the logo of the Tokyo Stock Exchange, prior to a ceremony marking the end of trading in 2012 at the Tokyo Stock Exchange in Tokyo December 28, 2012. Credit: Reuters/Kim Kyung-Hoon By Chikako Mogi TOKYO | Fri Mar 22, 2013 12:14am EDT TOKYO (Reuters) - Asian shares hovered near their lowest in nearly three months on Friday and the euro was under pressure as investors grew concerned about a possible debt default by Cyprus and deteriorating economic activity in the euro zone. The dollar held steady against a basket of major currencies .DXY while gold held near one-month high, supported by investor demand for safe-haven assets. "It's more this concern about what's happening in Cyprus," said Juliette Saly, a market analyst at Commonwealth Securities. "We did see some weakness come in from U.S. and European share markets so it's more global concerns that are really weighing on the market." The MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS inched up 0.1 percent, still near the lowest level in three months struck earlier this week. The pan-Asian index was set for a weekly loss of around 1.3 percent. The European Union gave Cyprus till Monday to raise the billions of euros it needs to secure an international bailout or face a collapse of its financial system that could push it out of the euro currency zone. "The main risk is that equity markets have come too far too fast and that investor sentiment may have become too optimistic," Barclays Capital said in a research. "However, we expect any correction to be contained given persistent fundamental support for equities: continued policy support, the low risk of a cyclical downturn and attractive valuations relative to fixed income." South Korean shares .KS11 were nearly flat while Hong Kong shares .HSI fell 0.3 percent. Australian shares .AXJO gained 0.4 percent. Market sentiment was further soured by dismal euro zone data, which offset upbeat U.S. reports on housing, future economic activity and business conditions in the mid-Atlantic region and improving Chinese factory output. Germany, the region's leading economy, showed signs of fatigue and French businesses turned in their worst performance in four years in March. France, the euro zone's second-biggest economy, likely fell into a recession. Investors will turn to Germany's Ifo business climate index for March due at 0900 GMT for further clues on the health of Europe's largest economy. "While we expect a constructive solution to emerge in the coming days, EUR/USD is likely to continue to face headline risk as capital controls will likely need to be imposed once banks re-open. There is also near-term risk for the euro from softer economic data," said Vassili Serebriakov, strategist at BNP Paribas. European shares dropped to a two-week closing low on Thursday, while crude oil and the euro fell on concerns over the banking crisis in Cyprus. The safe-haven gold rallied to its highest in almost a month and U.S. Treasuries and German government bonds also advanced amid the heightened risk aversion. NIKKEI DROPS Japan's Nikkei stock average .N225 shed 1.5 percent, after hitting a 4-1/2-year high on Thursday. .T Foreign investors bought 5.83 trillion yen worth of Japanese equities in the past 18 weeks through March 16, data showed on Friday, surpassing 5.80 trillion yen in their 19 straight weeks of net buying from late 2005 to early 2006, as they bet on pledges by Prime Minister Shinzo Abe to take aggressive reflationary measures to bolster Japan's growth. The dollar stabilized against the yen after falling more than 1 percent on Thursday when investors trimmed their bearish bet on the Japanese currency after the new Bank of Japan governor played down the chances of an emergency meeting. The dollar traded at 94.92 yen on Friday, off Thursday's low of 94.54 yen. The euro steadied around $1.2910, holding off a four-month low of $1.2844 hit on Tuesday. U.S. crude futures rose 0.2 percent to $92.67 a barrel while Brent was up 0.1 percent to $107.60. <O/R> Spot gold was little changed around $1,613.34 an ounce, near its one-month high of $1,616.36 touched on Thursday. <GOL/> <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ France/Germany GDP and PMI: link.reuters.com/jyd95t Euro zone PMIs, GDP: link.reuters.com/rud84s Cyprus deposits graphic: link.reuters.com/fuf76t ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Additional reporting by Thuy Ong in Sydney; Editing by Shri Navaratnam and Sanjeev Miglani) Link this Share this Digg this Email Reprints

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