By Shinichi Saoshiro
TOKYO (Reuters) – Asian stocks sagged on Tuesday amid ongoing growth concerns, while the Australian dollar plumbed six-year lows after the Reserve Bank of Australia cut interest rates to a record low.
MSCI’s broadest index of Asia-Pacific shares outside Japan dipped 0.2 percent after the latest batch of weak U.S. data worsened worries about the state of the global economy.
Japan’s Nikkei (.N225) shed 1.2 percent and Hong Kong’s Hang Seng (.HSI) lost 0.4 percent.
Many Asian bourses gained earlier in the session after Greece’s new government appeared to take a step towards ending a stand-off with its creditors, before the lift petered out.
Spreadbetters saw hopes for an agreement on the Greek debt standoff lifting European stocks, forecasting Britain’s FTSE (.FTSE) to open up by as much as 0.1 percent, Germany’s DAX (.GDAXI) 0.2 percent higher and France’s CAC (.FCHI) up 0.3 percent.
Buoyed by the RBA rate cut, Australian shares (.AXJO) bucked the trend and surged 1.5 percent. The RBA cut its cash rate by a quarter of a point to 2.25 percent in a bid to spur a sluggish economy.
As a consequence the Aussie retreated to $ 0.7650 (AUD=D4), lowest since May 2009. Suffering collateral damage, the New Zealand dollar retreated to a four-year bottom of $ 0.7194 (NZD=D4).
“There’ll be room for another cut this year, how soon remains to be seen. We’ve been thinking two (cuts) and it’s hard to steer away from that at this point,” said David De Garis, senior economist at National Australia Bank.
The RBA was the latest domino to fall as central banks across the globe eased to support sputtering economies and ward off deflation. The RBA move was seen adding pressure on the Bank of Korea to cut rates, forcing the Korean won to pare gains.
U.S. crude oil (CLc1) was up 0.6 percent at $ 49.88 a barrel, having already surged more than 10 percent over the past two sessions as some investors bet that a bottom had been reached after a seven-month-long rout. [O/R]
The currencies of oil-exporting countries such as the Canadian dollar and Norwegian crown held on to solid gains as a result.
The Canadian dollar was up 0.5 percent at C$ 1.2622 per (CAD=D4), well off a near six-year low of C$ 1.2800. The Norwegian crown (NOK=) climbed as far as 7.6142 per dollar, up more than 2 percent in the past two sessions. [FRX/]
The euro stood steady at $ 1.1328 (EUR=) after gaining 0.5 percent overnight on hopes for a deal on Greek debt and poor U.S. economic data.
Following last week’s disappointing GDP data, Monday’s indicators showed U.S. consumer spending fell and construction spending rose less than expected in December, while an industry report pointed to slowing in the manufacturing sector in January.
The dollar slipped 0.5 percent to 117.02 yen (JPY=), heading towards a two-week low of 116.64 overnight, weighed down as the Japanese currency rallied against the Aussie.
(Additional reporting by Wayne Cole in Sydney; Editing by Eric Meijer)
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