TOKYO, March 26 (Reuters) - Asian shares edged lower and the
euro wobbled on Tuesday as investors worried about potential
future fallout from the Cyprus bailout scheme, after initial
rallies on the last-minute rescue opened the way to book some
European markets were seen rebounding, with financial
spreadbetters predicting London's FTSE 100, Paris's
CAC-40 and Frankfurt's DAX likely to open as
much as 0.3 percent higher.
Benchmark indices in Spain and Italy were
seen to open 0.4 percent and 0.3 percent higher, respectively.
U.S. stock futures were up 0.2 percent to point to a
slightly firmer Wall Street start.
"The market had been positioned for a good result on Cyprus,
they got it and now there's profit taking," said Ric Spooner,
chief market analyst at CMC Markets.
"Bearing in mind that a crisis has been averted, the overall
situation is just a reminder of the risk involved in Europe. The
rescue process was fraught with politics and a risk that it
would fall over, and people were contemplating that this
morning," he said.
Japan's Nikkei stock average fell 0.7 percent, after
closing up 1.7 percent the day before.
The MSCI's broadest index of Asia-Pacific shares outside
Japan pared some of its earlier losses to inch
down 0.1 percent, after the Cyprus deal buoyed markets up by
more than 1 percent on Monday.
The pan-Asia materials sector led the
declines with a 0.8 percent drop, led by a loss of 0.7 percent
in Australian shares as investors sold miners and
financials in response to weaker metal prices and euro zone
Shanghai shares slid 1.9 percent and Hong Kong
stocks fell 0.6 percent.
China shares were headed for their worst loss in three
weeks, with brokerages hit by fears of more fund raising in the
sector, while mid-sized banks were sold on worries about tighter
mortgage lending restrictions.
South Korean shares bucked the downtrend with a 0.4
percent gain and Southeast Asian bourses also defied the
generally cautious mood and advanced, helping to limit losses
for the whole region.
Revived pressure on the euro helped nudge up the dollar
index, measured against a basket of major currencies,
towards a 7-1/2-month peak of 83.166 set earlier this month.
The euro steadied at $1.2864, after sliding more than
1 percent against the dollar and hitting a four-month low of
$1.28295 on Monday. The single currency closed below its 200-day
moving average of around $1.2880 on Monday for the first time
Traders said the euro was supported by short-covering and
repatriation before the end of the first quarter, but capped at
$1.3 on renewed concerns about the health of euro zone's
financial system. The euro hit a high of $1.3050 on Monday.
Against the yen, the dollar was steady at 94.17,
having touched a low of 93.53 yen on Monday, barely above a
recent low of 93.45 seen earlier this month.
Large, uninsured depositors and bondholders will bear heavy
losses in the Cyprus bailout, which Dutch Finance Minister
Jeroen Dijsselbloem, who heads the Eurogroup of euro zone
finance ministers, said represented a new template for euro zone
and other countries which may have to restructure their banking
Banks in Cyprus will remain closed until Thursday and even
then be subject to capital controls to prevent a run on
Initial rallies in global equities and the euro fizzled
after his remarks, as they raised the prospect of shifting more
risk to depositors and stakeholders in future.
While the bailout will avert collapse of the Cypriot banking
system and keep Cyprus within the euro zone, the agreement may
have set a painful precedent for the region.
"The design of the plan is setting market sentiment.
Attention is put into the details and any actual contagion risk
out of that plan, so overall sentiment is a little bit subdued,
but not collapsing," said Frances Cheung, senior strategist at
Credit Agricole CIB in Hong Kong.
Better U.S. data pointing to a continued recovery in the
world's largest economy provided some comfort to the market, and
while investors are growing accustomed to Europeans scrambling
to find last-minute solutions to avert a crisis, sentiment will
not sour drastically as long as there is no collapse in the euro
zone economy, she added.
In Japan, new central bank chief Haruhiko Kuroda, who took
over last week, said buying longer-dated debt was a policy
option to pursue monetary easing.
His comments sent benchmark 10-year Japanese government bond
yields down as low as 0.525 percent, its lowest
level since June 2003. The 10-year yield has hit the near-decade
low for a fourth straight day.
London copper was barely changed at $7,617.50 a
tonne while spot gold eased 0.2 percent, holding barely
above $1,600 an ounce as safe-haven demand ebbed after Cyprus
clinched the rescue, but concerns about the euro zone's banking
system checked losses.
U.S. crude futures steadied around $94.84 a barrel
and Brent also held steady at $108.21.