Asia: Stocks mostly higher ahead of ECB meeting

[HONG KONG] Asian markets extended their rally this week, while the euro edged up marginally ahead of a much-anticipated European Central Bank policy meeting.

For a second straight session Japanese shares bucked the regional trend as a third day of gains on Wall Street was overshadowed by a pick-up in the yen against the dollar.

Hong Kong added 0.52 per cent, Sydney added 0.59 per cent, Seoul put on 0.34 percent and Shanghai put on 0.50 per cent, but Tokyo eased 0.10 per cent.

Eyes are firmly on the meeting later Thursday of the ECB, with expectations high that it will unveil a programme of asset-purchasing, or quantitative easing (QE) similar to that recently ended in the United States.

Speculation has been rife for several months that more stimulus would be announced as inflation continues to weaken - last month prices actually fell in December for the first time in five years.

According to analysts at UniCredit, the market is expecting the ECB to unveil a programme worth between 500 and 800 billion euros.

Wall Street took its rally into a third day Wednesday, the Dow ending up 0.22 per cent, the S&P 500 adding 0.47 per cent and the Nasdaq 0.27 per cent higher.

With traders placing bets on a vast round of monetary easing the euro has been hammered in the past few weeks, and at one point last week fell below US$1.1500 for the first time since late 2003.

However Omer Esiner, chief market analyst at the currency brokerage Commonwealth Foreign Exchange Inc in Washington, told Bloomberg News the single currency had seen a pick-up ahead of the Bank decision.

In morning trade the euro bought US$1.1613 and 136.96 yen compared with US$1.1607 and 136.85 yen in US trade.

"With expectations for additional policy easing by the ECB tomorrow currently so high, any disappointment in the result could see a violent rally in the euro as investors rush to cover short positions in the single currency," Esiner said.

The dollar was 117.86 yen against 117.90 yen in New York.

Oil prices resumed their downtrend after enjoying a rare fillip Wednesday. US benchmark West Texas Intermediate (WTI) for March delivery fell 41 cents to US$47.37 and Brent shed 14 cents to US$48.89.

On Wednesday WTI jumped US$1.31 and Brent climbed US$1.04.

Gold fetched US$1,290.08 an ounce, against $1,300.64 late Wednesday.

AFP