Asian stocks are set to finish their best week in two months as investors scooped up bargains amid signs that heavy selling of the past few weeks was drawing to a close.
In the currency market, the Swiss franc was the main beneficiary of safety bids triggered by mounting tension in the Middle East.
Indonesian .JKSE and Indian stocks .BSESN, which have been pummeled last month saw some bargain buying this week while Japanese .N225 and Australian shares .AXJO succumbed to a bout of profit taking after posting solid gains.
The MSCI's index of Asia Pacific shares outside Japan .MIAPJ0000PUS rose by one percent, extending its weekly gains to nearly 2.7 percent, its best week since December.
Asian stocks hit a two-month low last Friday. The region's shares and bonds sold off heavily last month as investors fled to the relative safety of developed U.S. and Japanese markets because of inflation concerns, but there were signs that the sell-off may be drawing to a close.
Asia equity ETF redemptions slowed to just $55 million last week after averaging $369 million in the previous three weeks while local buying in India was the biggest since late 2009, data from Trim Tabs Investment Research showed.
Japan has been the best performing market in Asia so far this year, having gained some 6 percent, making it ripe for some profit taking.
"As we enter March when Japanese institutional investors normally aggressively sell to lock in gains ahead of earnings announcements and as the Nikkei nears 11,000 mark, some sort of correction seems inevitable in the mid-term," said Masayuki Otani, chief market analyst at Securities Japan Inc.
TREASURIES RALLY
Safe haven buying lifted U.S. Treasuries, with the 10-year benchmark yield falling to 3.60 percent, below a 10-month peak of 3.77 percent marked last week.
This week's drop has also calmed concerns that a relentless rise in U.S. yields would narrow the yield differentials with emerging market bonds and trigger further selling.
Ten-year yields are up by nearly 120 basis points since October.
Foreigners have resumed buying Indonesian local currency bonds after heavy selling last month as the central bank's rate rise offered some reassurance about its inflation fighting credentials. As a result, net ownership climbed to a new record and sent the rupiah up to a 3- year high.
Softer Treasury yields have also weighed on the U.S. dollar.
In the currency markets, the Swiss franc a safe-haven, climbed to two-week highs versus the dollar and euro as unrest spread across the Middle East and North Africa.Ten-year yields are up by 120 basis points since October.
Foreigners have resumed buying Indonesian local debt after heavy selling last month as the central bank's rate rise offered some reassurance about its inflation fighting credentials.
As a result, net foreign ownership climbed to a new record and sent the rupiah soaring to a 3- year high.
Softer Treasury yields have also weighed on the U.S. dollar.
Asian currencies received a leg up from China's move to guide the yuan to a record high before this weekend's G20 meeting.
U.S. crude futures for March delivery were trading above the $86 per barrel mark while ICE Brent crude for April delivery were trading around $103 levels..
Gold looked set to build on this week's hefty gains above the 1380 an ounce line.
In the currency market, the Swiss franc was the main beneficiary of safety bids triggered by mounting tension in the Middle East.
Indonesian .JKSE and Indian stocks .BSESN, which have been pummeled last month saw some bargain buying this week while Japanese .N225 and Australian shares .AXJO succumbed to a bout of profit taking after posting solid gains.
The MSCI's index of Asia Pacific shares outside Japan .MIAPJ0000PUS rose by one percent, extending its weekly gains to nearly 2.7 percent, its best week since December.
Asian stocks hit a two-month low last Friday. The region's shares and bonds sold off heavily last month as investors fled to the relative safety of developed U.S. and Japanese markets because of inflation concerns, but there were signs that the sell-off may be drawing to a close.
Asia equity ETF redemptions slowed to just $55 million last week after averaging $369 million in the previous three weeks while local buying in India was the biggest since late 2009, data from Trim Tabs Investment Research showed.
Japan has been the best performing market in Asia so far this year, having gained some 6 percent, making it ripe for some profit taking.
"As we enter March when Japanese institutional investors normally aggressively sell to lock in gains ahead of earnings announcements and as the Nikkei nears 11,000 mark, some sort of correction seems inevitable in the mid-term," said Masayuki Otani, chief market analyst at Securities Japan Inc.
TREASURIES RALLY
Safe haven buying lifted U.S. Treasuries, with the 10-year benchmark yield falling to 3.60 percent, below a 10-month peak of 3.77 percent marked last week.
This week's drop has also calmed concerns that a relentless rise in U.S. yields would narrow the yield differentials with emerging market bonds and trigger further selling.
Ten-year yields are up by nearly 120 basis points since October.
Foreigners have resumed buying Indonesian local currency bonds after heavy selling last month as the central bank's rate rise offered some reassurance about its inflation fighting credentials. As a result, net ownership climbed to a new record and sent the rupiah up to a 3- year high.
Softer Treasury yields have also weighed on the U.S. dollar.
In the currency markets, the Swiss franc a safe-haven, climbed to two-week highs versus the dollar and euro as unrest spread across the Middle East and North Africa.Ten-year yields are up by 120 basis points since October.
Foreigners have resumed buying Indonesian local debt after heavy selling last month as the central bank's rate rise offered some reassurance about its inflation fighting credentials.
As a result, net foreign ownership climbed to a new record and sent the rupiah soaring to a 3- year high.
Softer Treasury yields have also weighed on the U.S. dollar.
Asian currencies received a leg up from China's move to guide the yuan to a record high before this weekend's G20 meeting.
U.S. crude futures for March delivery were trading above the $86 per barrel mark while ICE Brent crude for April delivery were trading around $103 levels.
Gold looked set to build on this week's hefty gains above the 1380 an ounce line.
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