Asia markets hit by SARS fears
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Asia is on the alert for any re-emergence of the SARS virus.
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SINGAPORE (Reuters) -- Asia's surging stocks took a breather on Monday as investors feared a new SARS outbreak in China and after Wall Street stumbled on data that showed few jobs in the emerging U.S. recovery.
South Korean stocks, Asia's best performers on Friday, were led slightly higher by Kookmin Bank while Japan's financial markets were closed for a holiday. Singapore, Hong Kong and Taiwan markets dipped, while Australian stocks were flat.
But sentiment remained upbeat and traders expected sustained foreign buying, especially of technology stocks, with Japan poised to stretch last week's gains when it resumes trade on Tuesday amid hopes for improved corporate earnings.
An MSCI index of Asia-Pacific shares outside Japan gained 0.1 percent to stand at its highest level in nearly four years. It is up 5.2 percent so far this year.
The dollar was supported against the yen by investors who refrained from selling down the U.S. currency on caution over Japan's persistent yen-selling intervention and ahead of some key events and crucial U.S. data later in the week.
The dollar was also off Friday's record low of $1.2868 on the euro after the surprisingly weak U.S. jobs figures.
Optimism over an agreement on a $4.5 billion bail-out package for South Korea's LG Card Co propped up banking shares as the deal eased concerns of systemic risks from the debt-laden card firm.
State-run Korea Development Bank, which is taking a lead role in the rescue of debt-laden LG Card, said on Monday it aimed to replace top management at the ailing card issuer soon. (LG Card bosses to be replaced soon)
Shares in Kookmin, which played a leading role in helping curb losses faced by private banks in the rescue plan for LG Card, rose 6.3 percent, lifted also by an improved earnings outlook.
"With the LG Card issue wrapped up, nothing but a recovery is ahead for banks," said Kim Seong-joo, an analyst at Daewoo Securities.
But shares in LG Card reversed early gains of up to 10 percent to again dive by its 15 percent daily limit, capping the gains on South Korea's key index to 0.7 percent despite a 3.3 percent jump in the banking sub-index.
Eyes on G7
In the United States, companies hired 1,000 workers in December, below Wall Street forecasts of at least 130,000.
The unemployment rate fell in December to 5.7 percent, its lowest in more than a year, from 5.9 percent in November. But the decline was mainly because people dropped out of the work force.
The report showed that the economic recovery had yet to deliver sustained jobs growth, sending the Dow Jones industrial average down 1.3 percent to 10,458.89, its biggest single-day percentage drop since October.
The technology-heavy Nasdaq shed 0.6 percent to 2,086.92, but was up 4.0 percent on the week.
The dollar traded around $1.2838 to the euro and was around 106.1 yen at 0630 GMT, after trading just above 106 on Friday, before the Bank of Japan intervened and pushed it above 108 yen.
Traders said the market would watch Monday's meeting in Switzerland of rich-country central bankers for any clues on the dollar, ahead of a Group of Seven meeting in early February.
"There is a lot of attention building on the G7 meeting already," said David Simmonds, Royal Bank of Scotland's strategist in Singapore.
"A lot of people are looking at what tone the Europeans will take and obviously what would be the
general tone taken on Asia."
Sars alert
Hong Kong stocks, which had gained more than six percent this year, were down 0.3 percent, rattled by fears of an outbreak of the deadly Severe Acute Respiratory Syndrome (SARS) is in southern China.
On Monday, China confirmed a possible third SARS case, a 35-year-old man who has been isolated in hospital after showing symptoms of the respiratory disease. (Third suspected SARS case in China)
Taiwan's benchmark index ended down 0.1 percent after closing at a 20-month high on Friday as cash demand ahead of the Lunar New Year and fears that key banking legislation might be delayed hit financial shares.
Singapore shares fell 0.2 percent after an 11-day winning run.
