"Handshake across the Himalayas"
India and China will study new ways to ease tensions along their ill-defined border, Chinese Premier Li Keqiang said on Monday in his first foreign trip since taking office, which comes just weeks after a military stand-off between the Asian giants in the Himalayas. Full Article | Slideshow
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GLOBAL MARKETS - Dollar/yen near 15-yr lows, economic woes cap stocks
LONDON (Reuters) - The dollar hovered near a 15-year low against the yen on Tuesday, as prospects of more weak economic data from the United States added to worries about a global slowdown and capped gains in stock markets.
European shares followed most Asian stock markets slightly higher, although analysts said gains could prove to be fleeting given weak sentiment.
Markets also paused ahead of a debt auction by Ireland later in the day as yield spreads for peripheral euro zone economies remained under pressure, though Spain sold 12- and 18-month T-bills at reduced yields compared with last month.
"We wouldn't expect markets to make too much headway dramatically in either direction," said Graham Secker, European equity strategist at Morgan Stanley. "We're in a holding pattern until we get a breakout in the economic data."
The dollar steadied at 85.24 yen, having slid as low as 85.11 earlier on Tuesday -- within sight of a 15-year low of 84.72 yen reached last week as investors focused on whether Japanese authorities will take fresh measures to curb the yen's strength and boost a flagging domestic recovery.
Traders said it is only matter of time before the greenback falls past 85.00 yen and threatens to test last week's milestone due to a general bearishness towards the dollar.
The U.S. government will release reports on producer prices and housing starts for July later on Tuesday while the Federal Reserve's data on industrial production for the same month is also due. Weaker than expected numbers could push the U.S. dollar and yields on U.S. Treasuries lower still.
On Monday, data showed U.S. homebuilders' optimism hit a near 1-1/2 year low in August and a regional manufacturing gauge grew more slowly than expected. These numbers came after Japan reported growth slowing to a crawl in the second quarter, bolstering safe-haven flows.
GOLD AND METALS GAIN
Reflecting concerns of a slowing U.S. recovery from the longest and deepest recession since the 1930, investors consolidated positions in safe-haven assets like core government bonds and gold while staying wary about adding to risky trades.
"While the weak U.S. data is raising questions about the sustainability of the pace of the U.S. recovery, we believe the bigger risk is that the weakness being seen in the major economies globally will have a negative impact on investor sentiment," strategists at BNP Paribas said in a note.
The Thomson Reuters global stock index was 0.27 percent higher at 122.74 while the FTSEurofirst 300 index of top European shares was up 0.2 percent at 1,048.62 points. Miners led the gainers as metals prices rose, on the back of a weaker dollar.
Copper prices rose with many investors awaiting the release of industrial production data from the United States for a steer on demand prospects.
Three-month copper on the London Metal Exchange was at $7,311 a tonne in morning trade, compared with $7,250 at Monday's close. Aluminium was also higher.
Crude bounced from one-month lows but concerns remained that demand could take a beating following disappointing data from the United States and Japan, the world's largest and third-largest oil consumers.
U.S. crude for September delivery was up 0.5 percent to $75.64 a barrel at 0032 GMT, while October ICE Brent gained 35 cents to $75.98.
Gold gained, holding near its strongest level in more than a month struck the previous day. Traders expect spot gold to revisit Monday's peak of $1,227.15 an ounce -- the highest since July 1 -- over coming days.
U.S. Treasury debt prices eased, with benchmark yields staying around 17-month lows with investors awaiting more economic data for more clues on the health of the economy.
(Additional reporting by Brian Gorman in London)
(Editing by John Stonestreet)
(For more business news on Reuters India click in.reuters.com)
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