Summary In early European trade London was marginally higher, Frankfurt fell 0.3 percent
HONG KONG (AFP) - An early rally across Asian stock markets petered out towards the end of trade Thursday as investors turn their attention to a European Central Bank policy meeting later in the day.
Having surged for most of the day, a late sell-off saw some bourses turn negative by the close, with Shanghai -- which analysts say has been supported in the past few days by state-backed buying -- leading losers despite strong Chinese inflation data.
Confidence across trading floors has been broadly upbeat this month after a recent rally that has seen equities, oil and high-yielding, or riskier, currencies make up some of the hefty losses suffered in January and February.
And there is hope those gains can be built upon after the ECB s policy board gathers, with market-watchers asking how, rather than if, it will loosen the monetary belt.
The meeting comes as the eurozone struggles to break out of years of weak inflation and sagging economic growth, with bank president Mario Draghi under pressure to deliver after the last measures were criticised as half-hearted.
"There s very strong expectation that we re going to see further stimulus from the ECB, and the real question is how strong that stimulus will be," Chris Green, an Auckland-based strategist at brokerage and wealth management firm First NZ Capital Group, told Bloomberg News.
"We re seeing a more supportive environment for risk assets going forward."
Among the measures being considered is a cut in interest rates further into negative territory, an increase in bond-buying -- effectively printing more cash -- and an extension of the current asset-purchase past its March 2017 timeframe.
- Kiwi tanks -
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Japan s Nikkei index ended 1.3 percent higher, and Seoul was 0.8 percent higher. There were also healthy gains in Mumbai, Taipei and Manila but Sydney and Hong Kong each dipped 0.1 percent on late selling, while Singapore was 0.2 percent off in the afternoon.
Wellington put on 0.8 percent after the New Zealand central bank announced a surprise cut in interest rates to a record low, the first reduction since June. The move, while welcomed, sent the local dollar plunging two percent against its US counterpart.
In China, official figures showed inflation hit 2.3 percent in February, the highest in almost two years and beating expectations of 1.8 percent.
While the figures will be welcomed as a much-needed positive sign after Tuesday s wretched exports data, Shanghai stocks dropped two percent as analysts put the rise down to severe weather that sent food prices spiralling.
On oil markets, both main contracts eased after Wednesday s healthy gains fuelled by a US report showing a slower rise in stockpiles and lower gasoline inventories.
US benchmark West Texas Intermediate dipped 0.9 percent and Brent was one percent off. However, after sitting near 13-year lows below $30 a barrel just weeks ago, WTI remains in the high $30 region while Brent is hovering just below $41.
Prices have been supported in recent weeks by hopes that expected talks between key producers including Russia and Saudi Arabia will end with output freezes or even reductions.
In early European trade London was marginally higher, Frankfurt fell 0.3 percent and Paris rose 0.2 percent.
