Asian stocks slide as policy worries intensify
HONG KONG, Jan 21 (Reuters) - Asian stocks slipped and commodities paused on Friday after a recent selloff on worries that rising inflation may invite aggressive policy tightening and hurt growth in the world's engines like China and India.
"The market's pretty skittish when it comes to the risk of policy tightening," said Pengana Capital portfolio manager Tim Schroeders.
Gold edges up; investors interest weakens
SINGAPORE, Jan 21 (Reuters) - Spot gold edged up, recovering from a decline of two percent in the previous session, propped up by physical buying interest, but ebbing investment demand in consequence of an improved economic outlook continued to weigh on prices.
"It's long liquidation. ETFs keep redeeming," said a Singapore-based trader. "Some long-term gold holders have definitely been going out."
Oil heads for 2 percent weekly drop, U.S. crude below $90
SINGAPORE, Jan 21 (Reuters) - Oil was on track for a weekly drop of more than 2 percent, trading near its lowest in ten days, after U.S. inventories rose across all categories and on speculation monetary tightening by China would restrain demand.
"We acknowledge the perception of a rapid move to a triple-digit price level does negatively impact sentiment and does generate more cautious inventory procurement and management, which could add to the softer tone we now expect in the near term," JP Morgan analysts led by Lawrence Eagles said.
US corn eases after rebound on Argentina crop outlook
SYDNEY, Jan 21 (Reuters) - U.S. corn futures eased slightly in Asian trade on Friday, cutting into a rebound a day earlier driven by Argentina lowering its corn output forecast amid concerns over Australian feed wheat sales to China replacing U.S. corn.
U.S. corn futures had slid to a one-week low, falling nearly 4 percent in two days as China began buying feed wheat from Australia, which could potentially reduce Beijing's demand for corn from the United States.
OIL: Crude stay weak as U.S. stockpiles weigh
TOKYO, Jan 21 (Reuters) - U.S. crude futures stayed weak on Friday, a day after a sell-off amid an unexpected rise in U.S. crude stockpiles and worries that China might tighten monetary policy to fight inflation.
China's implied oil demand surged 19 percent to a record 9.6 million barrels per day (bpd) in December, ending the year with record refining volumes and strong diesel imports to ease a domestic diesel shortage.
COMMODITIES: Chinese rate hike fears rattle oil, copper
NEW YORK, Jan 20 (Reuters) - Oil and copper fell sharply and gold slipped on Thursday as investors worried that China will move to cool its booming economy, the engine of commodity demand growth this decade.
"The Chinese economy is clearly growing even faster than people thought it was," said Peter Buchanan, senior economist at CIBC World Markets in Toronto.
GLOBAL MARKETS: China rate concerns roil stocks, commodities fall
NEW YORK, Jan 20 (Reuters) - Global equities and commodity prices fell on Thursday after robust Chinese economic growth prompted fears the world's second-largest economy would try to choke off excessive demand that is fueling inflation.
"The tug of war continued during the course of the day with techs and financials -- the two big behemoths in terms of bellwethers for the market -- slugging it out," Joseph Benanti, managing director of Rosenblatt Securities in New York said about the U.S. stock market moves.
Alaksa pipeline pumping 605,000 bpd, near normal
ANCHORAGE, Jan 20 (Reuters) - The Trans Alaska Pipeline System has been pumping oil at an average rate of 605,000 barrels per day over the last 24 hours, returning to near normal levels after its restart from an outage on Monday, operator Alyeska said Thursday.
"We're ahead of where we thought we'd be," said spokeswoman Michelle Egan, in reference to the gradual ramping up of production on the line that was shut for much of last week after a small leak was discovered, and later repaired.
Alaska oil line facing increased risks as output falls
NEW YORK/ANCHORAGE, Jan 20 (Reuters) - Last week's shutdown of the Trans Alaska Pipeline System, a major artery for U.S. oil, may signal trouble ahead for Alaska's aging oil infrastructure, including more frequent incidents that could damage the environment and cause oil prices to soar.
Workers braved sub-zero temperatures to install a bypass around a small leak at TAPS, allowing the line that ships 12 percent of domestic crude supplies to restart on Monday, and halting the advance of oil prices toward $100 a barrel.
Argentina Exchange Trims Corn Forecast, Soy Estimate Held (Source: CME)
The Buenos Aires Cereals Exchange cut its estimate for Argentina's commercial corn production to 19.5 million metric tons, down 850,000 tons from last week's estimate. Drought damage last month led some farmers to turn their corn fields over to cattle pastures rather than bothering to harvest them, the exchange said in its weekly crop report. However, prospects are looking better after recent showers and forecasts for more rain over the next week, the exchange said. To date, 97.2% of the corn crop has been planted in Argentina, the world's second-leading corn exporter. The exchange held its forecast for soy area at 47 million tons. Dry weather blamed on the La Nina weather phenomenon had challenged the developing soy crop and stoked fears of a steep drop in production. While yields have already been affected in many areas, the increased rain arrived just in time to prevent steeper losses.
Soy planting is virtually complete in Argentina, the world's third-leading soybean exporter and the top shipper of soymeal and soyoil. The winter wheat harvest is virtually complete, with the exchange holding its forecast at 15 million tons. The sunflower seed harvest has just kicked off, with production estimated at 2.7 million tons by the exchange. Argentina is one of the world's leading exporters of sunflower seed oil.
Energy Dept. Offers $240M Loan Guarantee To Biofuels Plant (Source: CME)
The Obama administration awarded more than $600 million in loan guarantees to companies that make fuel from wood chips, municipal waste, cooking oil and other sources. The largest loan guarantee, $250 million, went to Coskata Inc., an Alabama company that will use wood scraps and other biomass products to produce 55 million gallons of ethanol per year. The second largest guarantee, $240 million, went to Diamond Green Diesel LLC, a joint venture between the refining company Valero Energy Corp. and Darling International Inc. Based in Louisiana, Diamond Green will produce diesel fuel using animal fats, used cooking oil and other grease wastes. The other two companies, Enerkem Inc. and INEOS New Planet BioEnergy LLC each received less than $100 million in guarantees. All companies have to meet certain conditions before completing the loan guarantees.
The loan guarantees were awarded by the U.S. Agriculture Department and the U.S Energy Department. Officials from both agencies said the guarantees promote the production of renewable fuels in the U.S., creating jobs and reducing the country's dependence on foreign oil.
China ends year with fast growth, slower inflation
BEIJING, Jan 20 (Reuters) - China finished 2010 with a bang, its growth soaring past expectations while inflation slowed just a touch, numbers that could prod the government to ratchet up its easy-does-it approach to tightening.
Food costs, the main driver of Chinese inflation, have picked up again in recent weeks, showing that Beijing still has its work cut out to keep a lid on price pressures.
U.S. housing starts lowest since late 2009
WASHINGTON, Jan 19 (Reuters) - Groundbreaking for new U.S. homes fell more than expected in December to the lowest in over a year, suggesting the battered housing sector remains a major roadblock to economic recovery.
U.S. housing starts dropped to an annual rate of 529,000 units, the Commerce Department said on Wednesday, down from November's 553,000 and well below forecasts around 550,000 in a Reuters poll. At current levels, starts account for less than a quarter of their boom-time peaks.
METALS-LME copper steady; China growing, inflation above f'cast
SINGAPORE, Jan 20 (Reuters) - London copper prices were steady on Thursday, underpinned by strong Chinese growth data, but inflation in the world's top commodity consumer, and rising stockpiles of copper, weighed on sentiment.Three-month copper on the London Metals Exchange was unchanged at $9,570 a tonne by 0701 GMT. The metal hit a record high of $9,781 on Wednesday.
China's annual gross domestic product growth sped up in the fourth quarter to 9.8 percent from 9.6 percent in the third quarter, according to the National Bureau of Statistics, defying expectations for a slowdown to 9.2 percent.
PRECIOUS-Gold steady on physical buying; China data supports
SINGAPORE, Jan 20 (Reuters) - Spot gold prices were steady on Thursday, after three days of consecutive gains, as physical buying in Asia continued, while data from China showing a higher-than-expected inflation number supported sentiment.
But the decline in holdings in physically backed exchange-traded funds signalled a shift in investor interest from gold and silver to riskier assets such as stocks amid a brighter economic outlook.China finished 2010 with a bang, its growth soaring past expectations while inflation slowed less than expected, numbers that could prod the government to step up its tightening measures.
FOREX-Euro pauses rally vs dollar as stocks struggle
LONDON, Jan 20 (Reuters) - The euro slipped against the dollar on Thursday as weaker global shares stifled appetite for higher-risk currencies, prompting investors to book profits on the single currency's rally to a two-month high.
European shares were pressured lower, taking a cue from weaker Asian markets after stellar economic growth in China in 2010 fuelled speculation that Beijing may come under more pressure to tighten monetary policy.Lingering concerns about the effectiveness of an EU rescue fund for euro zone countries struggling with debt problems also helped to keep sentiment negative for the euro on Thursday.
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