* MSCI Asia ex-Japan rises 1 pct, Nikkei adds 0.7 pct
* Euro off four-month low, dollar eases from four-month peak
* U.S. crude futures, gold recover; Brent near four-month
* European shares seen mixed
By Chikako Mogi
TOKYO, May 17 (Reuters) - Asian shares recovered some ground
on Thursday from the previous day's sell-off, but investors
found little reason to chase risk amid deepening turmoil in
Greece and fears of contagion to other stressed euro zone
Against a background of financial instability in Greece's
banking sector, European shares were set to start mixed, with
financial spreadbetters predicting that major European markets
would open between a 0.2 percent drop
and a 0.1 percent rise. U.S. stock futures were up 0.6
Gold and the euro recouped most of their losses from
Wednesday as signs of stability in share markets helped improve
sentiment slightly, but Brent bore the brunt of general risk
aversion, slipping to a near four-month low.
MSCI's broadest index of Asia-Pacific shares outside Japan
rose 1 percent on short covering, after sliding
more than 3 percent - its biggest one-day drop in six months -
and hitting a new four-month low on Wednesday. The index has
shed about 8 percent so far in May.
Bucking the general trend of recovery in Asia-Pacific,
Australian shares fell to a four-month low, with banks
easing on more signs of pressure on margins.
Japan's Nikkei stock average gained 0.7 percent.
News on Wednesday that some Greek banks face emergency
funding needs dealt a further blow to risk sentiment, already
beaten down by worries about much slower economic growth in
China, a fragile U.S. jobs market and a shock trading loss at
JPMorgan Chase & Co.
"May is typically a bear month for markets as players often
look to take advantage of the saying, 'sell in May and go away,'
but all the negative factors compounded to give momentum to sell
risk assets indiscriminately," said Bob Takai, general manager
of Sumitomo Corp's energy division, adding that the markets will
likely remain depressed for the next two to three quarters.
The European Central Bank said it has stopped providing
liquidity to some Greek banks that have not been successfully
Greece on Wednesday put a senior judge in charge of an
emergency government to lead the nation to its second election
in just over a month on June 17. The vote will likely determine
whether the highly indebted country remains in the common
The head of the World Bank warned on Wednesday that a
decision by Greece to leave Europe's common currency zone would
raise big questions about the impact on Spain, Italy and other
euro zone countries with big debt loads that are undergoing
ANZ of Australia said in a research note that its baseline
scenario was a 70 percent probability of the euro zone staying
intact and a 50 percent probability of a policy shift to growth
over austerity, giving some support to risk assets and the euro.
It put the chance of a disorderly exit at 4 percent and the
likelihood of a total break-up of the euro zone at just 1
Stress levels eased slightly but remained high in Asian
credit markets. The spread on the iTraxx Asia ex-Japan
investment-grade index narrowed 4 basis points to
hover just below its widest level since mid-January.
The euro added 0.2 percent to $1.2740, off a
four-month low of $1.2681 reached on Wednesday, and the
Australian dollar, typically linked to risk appetite, rose 0.4
percent to $0.9949, having hit a five-month low of
$0.9870 on Wednesday.
The dollar index measured against key currencies
eased from a four-month high reached on Wednesday.
Three month euro/dollar cross currency basis swaps
, which show funding stress when investors
compete for dollars, on Wednesday widened to minus 54 basis
points from around minus 46 bps in early May, but far below
minus 167.5 marked in November when investors feared another
Sumitomo's Takai said commodities were being pressured
across the board by overwhelming risk aversion. He saw more
scope to the downside until prices reached "fair value" levels
as measured by production costs, which were below current
"Over the long run, commodities have not lost their appeal
as being underpinned by demand from emerging economies. But for
now, they can't escape the pressure to cut risks across asset
classes which will likely last until investors regain confidence
in financial markets," he said.
U.S. crude futures gained 0.9 percent to $93.61 a
barrel, after settling down more than $1 on Wednesday. Brent
futures were down 0.1 percent to $109.69 a barrel.
Spot gold recovered from Wednesday's 4-1/2 month low
of $1,527 an ounce to trade up 0.8 percent at $1,550.11 as
bargain hunting set in.
Some positive economic news emerged from Japan, the world's
third-largest economy, helping to soothe sentiment.
Japan's economy bounced back from a year-end lull in the
first quarter, powering ahead of other major industrial nations
to grow 1.0 percent in the January-March quarter. Growth in the
final three months of 2011 was revised to flat from a 0.2
percent contraction, data showed.