Asian shares firm after sound U.S. data

By Hideyuki Sano

TOKYO (Reuters) - Asian shares gained on Monday after U.S. jobs data pointed to solid economic growth, with Hong Kong leading the gains after regulators set a date for a long-awaited trading link between the Hong Kong and Shanghai stock exchanges to open.

MSCI's broadest index of Asia-Pacific shares outside Japan rose 1.2 percent, led by 1.8 percent gains in Hong Kong.

Financial spreadbetters expected Britain's FTSE 100 to open 13 to 21 points higher, or up as much as 0.3 percent, Germany's DAX to open down 8 points to flat, and France's CAC 40 to open up as much as 0.2 percent.

"It was a familiar combination. Rising payrolls, a falling jobless rate and stagnant wages. All this means is that the U.S. economy is moderately recovering, and no major shift in the Fed's policy outlook, which should reduce market volatility," Tohru Yamamoto, chief fixed income strategist at Daiwa Securities, said in a report.

U.S. employers added 214,000 jobs in October, slightly below economists' median forecast but logging the ninth consecutive month of gains of more than 200,000, the longest stretch since 1994. Unemployment fell to a six-year low of 5.8 percent.

"The payrolls outcome is supportive for asset markets since it was strong, but not so strong as to drive re-pricing on risks," Citi analysts said in a note to clients.

In Asia, meanwhile, Chinese stocks rose after regulators announced that the long-awaited pilot programme allowing cross-border investment between the Shanghai and Hong Kong stock markets will launch on November 17.

The CSI300 index rose more 2 percent while the Shanghai Composite Index also gained 2 percent and Hong Kong's Hang Seng index gained 1.8 percent.

Mainland indexes had seen surging volumes in the run-up to the announcement, as investors poured money into long-neglected financial stocks on mainland exchanges, expected to be the primary recipients of investment from Hong Kong.

Chinese economic data published at the weekend and on Monday was mixed but contained few surprises, doing little to change expectations that Beijing will roll out more stimulus measures to support the economy.

Annual consumer inflation remained near a five-year low of 1.6 percent in October, unchanged from September while the producer price index fell a deeper-than-expected 2.2 percent in October from a year earlier.

Trade data on Saturday showed exports were better than expected, though the official Shanghai Securities News said on Monday the reading showed signs of manipulation as well as inflows of speculative hot money.

Japan's Nikkei bucked the regional trend, falling 0.6 percent as the yen rebounded on profit-taking in the dollar following the U.S. payrolls data.

The U.S. dollar stepped back from a four-year peak against a basket of currencies, with the dollar index standing at 87.43, retreating from Friday's 88.190 - a high not seen since June 2010.

As the dollar slipped, the euro fetched $1.2480, off a two-year low of $1.2358 hit on Friday.

The yen traded at 114.07 to the dollar, gaining 0.4 percent on Monday and rising further from its seven-year low of 115.60 per dollar hit on Friday.

The dollar's fall lifted the battered gold price from 4 1/2-year lows. Gold traded at $1,172.50 per ounce, above Friday's low of $1,131.85.

Still, the relative strength of the U.S. economic recovery is likely to underpin the dollar, analysts said.

"We are not changing our bullish dollar view, just that it needs a steady stream of good data to remind everyone why they are buying the currency and the coming week cannot help here, we only speak of consolidation," David Keeble, head of global markets strategy for Americas at Credit Agricole, said in a note.

Oil prices rose on Monday on renewed geopolitical tensions in the Middle East and Ukraine, with Brent crude gaining 0.6 percent, extending its recovery from four-year low hit last Wednesday.

Fierce fighting between Iraqi military forces and Islamic State insurgents, the third Libyan oil field closure in a week and shelling in the pro-Russian stronghold of Donetsk in eastern Ukraine all helped to lift oil prices.

In Europe, attention could turn to Spanish bonds after millions of Catalans voted on Sunday in a symbolic referendum on independence from Spain.

Spanish bond yields rose slightly on Friday on worries the vote, while not legally binding, could spark tensions between Madrid and one of Spain's wealthiest regions.

(Additional reporting by Vidya Ranganathan; Editing by Eric Meijer)