Asian markets steady, hoping for action on euro zone crisis

Asian shares and commodities staged a mild recovery on Tuesday, with stocks holding a touch above 2012 lows, as investors looked to European policymakers and the wider G7 to take decisive action to address the worsening euro zone crisis.In a sign of heightened global alarm about strains in the 17-nation euro area, finance chiefs of the Group of Seven leading industrialized powers will hold emergency talks by phone later on Tuesday.The MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.6 percent, after tumbling 2 percent during Monday's sell-off which had been sparked by last week's weak U.S. jobs data.Japan's Nikkei average of major stocks also edged up 0.4 percent and Tokyo's broader Topix index firmed 0.7 percent after the latter hit a 28-year low on Monday.The euro rose 0.2 percent to $1.2520, recovering from Friday's trough of $1.2288, its lowest in nearly two years. The Australian dollar, which is closely linked to risk appetite, also rallied further from an eight-month low hit on Friday.The yen traded at 78.33 against the U.S. dollar, off its 3-1/2 month peak of 77.65 hit on Friday. The Japanese currency also eased against the euro to trade at 97.92 yen on Tuesday, retreating from its strongest level since December 2000 of around 95.59 yen reached on Friday.The benchmark Thomson Reuters-Jefferies CRB index, a global commodities benchmark, settled up 0.6 percent on Monday for its sharpest gain since April 27, after dropping almost 11 percent in May, the second-largest monthly decline since 2008.Investors turned less pessimistic ahead of three major events this week: the G7 phone hook-up on Tuesday, the European Central Bank's policy decision on Wednesday and U.S. Fed Chairman Ben Bernanke's congressional testimony on Thursday."It's interesting to see what G7 will discuss ahead of the ECB meeting tomorrow," said Eiji Kinouchi, chief technical analyst at Daiwa Securities."They might probably put pressure on the ECB to do something and such expectations will help support stocks."But Greek elections on June 17 remain a major uncertainty, with surveys showing supporters and opponents of Greece's international bailout are virtually neck-and-neck going into a vote that may decide the nation's future in the euro zone."It is difficult to see anything sizable ahead of the Greek vote. The ball is more on the political side," said Sebastien Galy, strategist at Societe Generale.G7, EU GRAB SPOTLIGHTThe previous session's heavy selling, which started in Europe and North America on Friday and continued into Asia on Monday, has spurred hopes for more monetary stimulus from not only the ECB but also from the U.S. Federal Reserve to embark on a third round of quantitative easing to help stabilise markets.Contagion worries about Spain's banking troubles and Greece's potential exit from the euro zone have pushed up the cost of borrowing dollars as investors charge higher premiums from banks and bond dealers for short-term loans. Eurodollar futures fell on Monday, implying a rise in futures costs on interbank borrowing for three-month dollars.U.S. stocks steadied while euro zone equities nudged higher on Monday on hopes for fresh measures from policymakers to help the region's troubled banks.France and the European Commission signalled their support on Monday for an ambitious plan to use the euro zone's permanent bailout fund to rescue stricken banks, ahead of a European Union summit at the end of the month.U.S. crude gained 0.9 percent to $84.70 a barrel on Tuesday, rebounding from its lowest in nearly eight months touched the previous session. Brent rose 0.7 percent to $99.55 a barrel on Tuesday..Copyright Thomson Reuters 2012

Asian markets steady, hoping for action on euro zone crisis

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