TOKYO: Asian shares inched higher and the euro stayed above a 17-month trough on Tuesday as investors focused on economic data from China to gauge the impact of the euro zone debt crisis on global growth.

MSCI’s broadest index of Asia Pacific shares outside Japan was up 0.3 percent, after hitting its lowest in about a week on Monday, while Japan’s Nikkei average opened up 0.5 percent, off a four-week low hit the day before.

European shares and the euro recovered on Monday, shrugging off the latest move by Standard & Poor’s to cut a top-notch credit rating on the euro zone’s bailout fund, following mass downgrades late last week which stripped France and Austria of their prime AAA ratings. U.S. markets were closed for a holiday on Monday.

The euro stood at $1.2663, hovering above a low of $1.2624 hit on Friday, its lowest since late August 2010, according to trading platform EBS. It also held steady against the yen at 97.29 yen, having hit an 11-year low near 97 yen on Monday. Sentiment was subdued in Asian credit markets early on Tuesday, keeping spreads barely changed on the iTraxx Asia ex-Japan investment grade index.

For now, investors were turning to economic data, although sentiment remained pressured by persistent concerns about Europe’s ability to resolve its two-year-old debt crisis, with Greece struggling to break a deadlock on its debt-swap talks, keeping intact fears of a default.

“As EUR/USD tumbles toward a key long-term support level, it is interesting to note that the positive correlation between EUR/USD and equities is starting to erode,” RBC Capital Markets said in a report, referring to a recovery in S&P 500 index futures from mid-December as the euro eased against the dollar.

“The key take-away here is that the ‘risk on/risk off’ dynamic may be starting to have less of an influence on markets, with pure ‘fundamentals’ becoming more relevant as the Eurozone crisis is now infecting core markets,” it said.

CHINESE GDP DATA DUE

The main focus on Tuesday is Chinese GDP data, forecast for a fourth successive quarterly slowdown in growth to around 8.7 percent from 9.1 percent previously. For more visit: Economic times

Similar Posts:

• Asian shares hit by weak China data, Europe jitters
• Asian shares fall on US fiscal worries, Europe uncertainty
• Markets turn red as Greece, Portugal are downgraded
• Asian shares up on Wall St rally, China hopes
• World stocks steady amid worries over US recovery