GLOBAL MARKETS-Stocks pause as caution sets in after dramatic rally
HONG KONG, Dec 2 (Reuters) - Asian stocks paused on Friday, a day after posting their biggest single-day rise in more than two months, as investors cashed in some gains and looked ahead to a key European summit next week for more progress on tackling the euro-zone debt crisis.
"Investors' alarm over the euro-zone debt crisis and the short-term outlook seems to have receded slightly, but without more trading volume it is difficult to see the Nikkei push near 8,700," said Hiroichi Nishi, equity general manager at SMBC Nikko Securities.
Bank of Korea Says It Boosted Gold Holdings in Foreign-Exchange Reserves (Bloomberg)
The Bank of Korea, which controls the world’s eighth-biggest foreign-exchange reserves, boosted gold holdings for the second time this year as investors sought safer assets amid Europe’s debt crisis. The central bank bought 15 metric tons last month, boosting holdings to 54.4 tons, which is equivalent to 0.7 percent of its total reserves, Lee Jung, head of the investment strategy team at the bank’s Reserve Management Group, told reporters in Seoul. Central banks are expanding reserves for the first time in a generation as the precious metal is in the 11th year of a bull market. Purchases of as much as 450 tons in 2011 may be repeated next year as Asian nations and emerging economies diversify their reserves, UBS AG said Nov. 30.
China Stocks Fall on Economic Concern, Head for 4th Weekly Slump (Bloomberg)
China’s stocks (SHCOMP) fell, pushing the benchmark index towards a fourth week of losses, as sliding property prices and the slump in manufacturing added to concern the economic slowdown is deepening. China Shenhua Energy Co. (601088) and Jiangxi Copper Co. (600362) led losses for energy and material producers, the biggest decliners among 10 industry groups in the CSI 300 Index. China Southern Airlines Co. the largest domestic carrier (600029), plunged 4.6 percent after the China Securities Journal said the government raised wholesale jet fuel prices. The Shanghai Composite Index rose 2.3 percent yesterday, as the first cut in lenders’ reserve requirements since 2008 overshadowed a report showing the Purchasing Managers’ Index contracted for the first time in two years.
The Shanghai Composite, which tracks the bigger of China’s stock exchanges, slid 34.34 points, or 1.4 percent, to 2,352.52 at the 11:30 a.m. local-time break. The CSI 300 lost 1.2 percent to 2,552.61. The Bloomberg China-The Bloomberg China-US 55 Index was little changed at 101.09 at the close in New York.
COMMODITIES-Copper, Brent oil lead losses as rally fades
NEW YORK, Dec 1 (Reuters) - Commodities fell broadly
on Thursday as a rally sparked by a global central bank liquidity boost ran out of steam, reverting attention to Europe's slowing growth and sluggish factory activity in China.
"After such a sharp move on what was basically an item out of the blue, you're always going to get profit-taking," Stephen Briggs, an analyst at BNP Paribas in London, said on Thursday.
Crude falls on economic woes, US jobs data awaited
NEW YORK, Dec 1 (Reuters) - Crude oil futures fell on Thursday as investors focused on signs of further economic slowdown in Europe and a weaker factory sector in China rather than strong U.S. manufacturing data and a move by global central banks to stave off a credit crunch.
"We continue to view the crude oil market as navigating between the currently tight physical oil markets and the threat that the European debt crisis could trigger a global economic recession in the near future, which would lead to a sharp drop in oil demand," Goldman Sachs analysts led by David Greely said in a research note.
EU may study oil embargo on Iran; China urges calm
BRUSSELS/TEHRAN, Dec 1 (Reuters) - The European Union tightened sanctions against Iran on Thursday and laid out plans for a possible embargo of its oil in response to mounting Western suspicions that Tehran plans to build nuclear weapons.
China, the biggest buyer of Iranian crude, stepped in to warn against "emotionally charged actions" that might aggravate the row over the storming of Britain's embassy in Tehran.
Natural gas ends up after unexpected EIA stock draw
NEW YORK, Dec 1 (Reuters) - Front-month U.S. natural gas futures ended higher on Thursday, backed by a government report showing an unexpected drop in domestic gas inventories last week, the first withdrawal of the heating season.
"The (EIA) report was more bullish than expected, and inventory numbers over the last three weeks have been supportive on a weather-adjusted basis, but I'm still leaning bearish," a Massachusetts-based trader said, noting storage was still near record highs and offered a huge cushion to meet demand even if winter turns out to be extremely cold.
Euro Coal-Prices stable on equities, euro gains
LONDON, Dec 1 (Reuters) - Physical prompt coal prices were little changed on Thursday despite a fall in oil as signs of further economic slowdown in Europe and a weaker factory sector in China outweighed encouraging U.S. manufacturing data.
"We continue to favour the fundamentals for copper, coal and iron ore," Credit Suisse said in its Metals and Mining research note.
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