* Dollar weighed by economic concerns
* Softer U.S. yields also puts greenback on back foot
* Oil supported above $50 per barrel
By Saikat Chatterjee
HONG KONG, May 22 Asian stocks posted their
biggest daily rise in a month on Monday following modest gains
in U.S. shares, though the greenback came under renewed pressure
as Washington's political turmoil undermines confidence in U.S.
With U.S. President Donald Trump touring in the Middle East
and Europe and no major economic indicators due this week,
investors are hoping for a week of consolidation after a flurry
of U.S. political controversies rattled markets.
MSCI's broadest index of Asia-Pacific shares outside Japan
climbed 0.9 percent on Monday helped by gains in
Australia and Hong Kong stocks despite fresh curbs unveiled by
regulators on the property markets in the latter.
European stocks are set to follow in Asia's wake with key
indices set to edge higher in opening trades.
"This won't have much impact on the market as buyers will
continue to focus on the primary market rather than the
secondary market where these measures will be more acutely
felt," said Alex Wong, a fund manager at Ample Capital Ltd in
Hong Kong, with about $130 million under management.
Chinese stocks were the only laggards in the region with
mainland indices in negative territory as
concerns over renewed economic slowdown and overbearing
regulation to curb broad financial risks weighed on sentiment.
The bounce in Asian stocks has been the best performance
since April. 25 and has notched up gains of more than 17 percent
for the MSCI emerging stocks index compared to 8 percent for the
world index - even as some investors grew wary of the outlook.
"At current market valuations, we advise investors to adopt
an active approach by stock-picking across sectors and rotating
to quality laggards," Carl Berrisford, an analyst at UBS Wealth
Management wrote in note, citing valuations nearing their peak.
U.S. stocks ended up on Friday but closed below their
session highs on renewed concerns about Trump's presidency,
following two new media reports of possible coordination between
Russia and his election campaign.
Stock index futures were mildly higher in Asia.
"The escalation of the investigation into Russia's
involvement in the recent U.S. election threatens to take
resources, time, and attention away from the economic agenda,
which had already begun meeting some scepticism," Marc Chandler,
global head of currency strategy at Brown Brothers Harriman,
wrote in a note.
In foreign exchange markets, the dollar fell to its lowest
levels in six months on Friday against a trade-weighted
basket of peers at 97.080 and was trading just a shade above
that on Monday.
The dollar was trading at 111.47 yen after falling
nearly 2 percent last week, while the euro inched down 0.1
percent to $1.11900 after rising to a six-month high of
$1.1212 on Friday.
Signs from the government bond markets did not bode well for
the greenback. U.S. bond yields have gently drifted lower in
recent days cutting the yield premium U.S. Treasuries earn
versus other bond markets such as German or Japanese official
Net long positioning on the euro rose to its highest in more
than three years in the week ended May 16, according to
calculations by Reuters and Commodity Futures Trading Commission
data issued on Friday.
Recent economic improvement in the euro zone has raised
market expectations the European Central Bank will tone down its
dovish language at its next Governing Council meeting next
Oil clung on to Friday's gains trading around $50.69
(Reporting by Saikat Chatterjee; Additional reporting by Tokyo
markets team and Rick Lloyd; Editing by Eric Meijer)