SINGAPORE, Dec 18 - The dollar was mired near a record low against the euro on Thursday, firing gold to its highest level in nearly eight years, while oil prices hovered around peaks not seen since the Iraq war. Most Asian stocks rebounded after sharp falls the previous day, after the World Health Organisation said a SARS case in Taiwan appeared to be an isolated incident. In the world's largest initial public offering this year, shares of China Life Insurance Co <2628.HK> rose 24 percent in their Hong Kong debut, slightly lagging a 27 percent first-day gain in New York after the insurer raised $3 billion. Japan's Nikkei stock index <.N225> closed up 0.1 percent at 10,104.00, lifted by blue chips such as Toyota Motor Co <7203.T> as SARS fears eased. "Yesterday's SARS case certainly looks different from the widespread outbreak we saw last time," said Masaharu Sakudo, an adviser at Tachibana Securities. An MSCI index of Asia Pacific shares outside Japan <.MSCIAPJ> was up a quarter of a percent, near a three-year high hit on Monday. European stock markets were expected to start mixed, according to financial bookmakers, who saw London's FTSE 100 index <.FTSE> opening up as much as 0.5 percent, Germany's DAX <.GDAXI> falling by a similar degree and France's CAC 40 <.FCHI> up 0.1 percent.
OIL SURGES
Oil prices hovered around a nine-month high, rising 28 cents to $33.63, as a cold U.S. winter drove crude stocks down for a fourth consecutive week. A further boost to prices came after an Iraqi official said Iraq's northern export pipeline, closed since the U.S.-led invasion in March, had been attacked again and was still too vulnerable to reopen. The euro, which set a record high of $1.2423 on Wednesday, was steady at $1.2401. Wednesday's peak marked the 12th record high in 14 trading sessions for the euro, which has surged almost 19 percent this year. The dollar was fetching 107.57 yen , little changed on the day and off a three-year low of 106.74 hit last week. Low U.S. interest rates and ballooning budget and current account deficits have weighed on the dollar for some time but it has found support against the yen due to wariness over Japanese intervention to protect an export-driven economic recovery. The sagging dollar has been one of the main drivers behind an 18 percent rise in gold prices this year. Spot gold rose as high as $413 an ounce before sliding to $410.25, compared with New York's last quoted level of $411.75.
U.S. bond prices extended gains sparked by a drop in the U.S. consumer price index in November, which indicated interest rates would remain at 45-year lows for some time. The benchmark 10-year note was yielding 4.19 percent in Asia. Japanese government bond prices eased on caution over an ongoing auction of 20-year bonds, with the yield on the benchmark 256th 10-year cash bond <0#JPTSY=JBTC> up three basis points at 1.350 percent.
ASIAN STOCKS REBOUND
Shares in Taiwan <.TWII> gained 0.3 percent, while South Korea <.KS11> climbed 0.9 percent. Hong Kong <.HSI> was up two-thirds of a percent at the midday break. Asian stocks firmed as fears eased over the first case of SARS since September, but gains were capped by global security concerns and the weak dollar. Japan's number-one mobile phone operator, NTT DoCoMo Inc <9437.T>, rose 2.3 percent after losing more than four percent in the previous session. Toyota was up 3.8 percent. China Life's Hong Kong-listed shares were trading at HK$4.47, compared with an IPO price of HK$3.59. The offer from China's top life insurer was about 25 times subscribed as investors clamoured for a piece of a Chinese economy growing at more than eight percent a year. China stocks listed in Hong Kong <.HSCE> have doubled this year. On Wall Street, the Dow Jones Industrial Average <.DJI> ended up 0.15 percent at its highest finish since May 2002, while the technology-heavy Nasdaq <.IXIC> fell 0.15 percent. Market players were looking ahead to U.S. jobless and manufacturing data later in the day.//www.reuters.com