Asian stocks fall in early trade as euro zone jitters undermine confidence

Asian shares edged down in choppy trade, while gold and oil rose on Monday, encouraged by a fresh report of a potential framework for the European Central Bank’s new bond buying scheme, as well as hopes of a strong easing from the Federal Reserve.

Growing hopes for more accommodative monetary stance around the world helped gold break a key resistance last week, which had held for months. Spot gold hit a fresh 4-1/2 month high of US$1,676.45 an ounce on Monday, while spot silver hit a near four-month high of US$31.17 an ounce.

Oil futures gained more than US$1 on supply concerns on Monday, with U.S. crude up 1.6 per cent to US$97.69 a barrel and Brent up 1.6 per cent to US$115.38.

“Commodities which are highly sensitive to monetary policy easing are underpinned by such speculation, so it’s hard to sell in markets such as gold, silver and oil where it’s easier for speculative money to flow in,” said Bob Takai, general manager of Sumitomo Corp’s energy division.

MSCI’s broadest index of Asia-Pacific shares outside Japan was off 0.2 per cent in choppy trade. Seoul shares fell 0.3 per cent, dragged lower by a plunge in Samsung Electronics after a US jury found it had copied critical features of Apple.

Australian shares rose 0.3 percent, supported by gains in the mining and banking sectors on stimulus hopes, while Japan’s Nikkei stock average gained 0.3 per cent.