Asian shares cautious ahead of key events

Asian share markets crept cautiously higher on Tuesday after Wall Street notched up a


late rally, but conviction was sorely lacking with Tokyo shut for a holiday and plenty of major events looming later in the week.

Australian stocks rose 0.3% ahead of what is expected to be another round of record profit results by the country's major banks.

The South Korean market edged 0.1% higher with Samsung Electronics reporting a 3.3% fall in first quarter operating profit to 8.5 trillion won. That still pipped market forecasts of 8.4 trillion and its shares were steady in early trade.

The lack of momentum showed in MSCI's broadest index of Asia-Pacific shares outside Japan which was dead flat after retreating by 1% on Monday.

Events in Ukraine provided an excuse for caution. The United States slapped sanctions on seven Russian government officials and 17 companies linked to Russian President Vladimir Putin in a fresh attempt to force Moscow to back down from its intervention in Ukraine.

Wall Street put in another erratic performance but mostly ended in the black. The Dow closed 0.53% firmer, while the S&P 500 added 0.32%. The Nasdaq finished flat amid falls in Amazon and Facebook.

What gains there were owed much to the M&A fever in pharmaceuticals. Pfizer Inc said it approached Britain's AstraZeneca Plc to reignite a potential $100 billion takeover but was rebuffed, stoking speculation of a bidding war.

AstraZeneca shares rallied 14.4% in London, while Pfizer rose 4.2%. It was the biggest gainer in the Dow and the fourth-biggest by percentage points in the S&P 500.

The potential, albeit distant, that Pfizer might need pounds to pay for the bid gave speculators a reason to go long on sterling. The currency climbed to a four-and-a-half year peak on the dollar at $1.6856 before fading to $1.6808.

The euro followed the pound higher to as far as $1.3879, aided in part by a Reuters report playing down the chance of any near-term easing in euro zone monetary policy.

European Central Bank President Mario Draghi told lawmakers from Germany's ruling coalition on Monday that low inflation would persist in the euro zone but quantitative easing remains some way off, according to a source who took part in the meeting.

On Tuesday, the euro was holding at $1.3855 and still well within the $1.3783/1.3905 band that has held for the last couple of weeks.

The dollar has been equally range-bound on the yen, bouncing back and forth between 101.95 and 102.72 for the past seven sessions. It was hovering at 102.48 on Tuesday as investors waited to see if this week's Federal Reserve policy meeting or US jobs data provided the impetus to break the range.

In commodity markets, Brent crude oil was 10 cents higher at $108.22 a barrel on Tuesday, but that followed a drop over a dollar on Monday when Libya paved the way to restart exports at a second port after a deal with rebels to unblock major terminals.

US crude added 8 cents to $100.92 a barrel.

Spot gold faded to $1,295.96 an ounce after failing to break resistance around $1,306.00.

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