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Asian shares mixed, Iraq crisis caps gains

Asian shares were mixed on Monday, with initial losses recouped in some markets but gains capped by fears over the Iraq crisis that has sent oil prices to nine-month highs.

HONG KONG: Asian shares were mixed on Monday, with initial losses recouped in some markets but gains capped by fears over the Iraq crisis that has sent oil prices to nine-month highs.

The uncertainty fuelled by the insurgents who have seized a swathe of Iraq sent traders into safer assets, with the yen ticking higher against the dollar and the euro while gold also rose.

The pound touched a five-year high against the dollar on expectations the Bank of England will raise interest rates within the next six months.

Tokyo tumbled 1.09 percent, or 164.55 points, to finish at 14,933.29 as the strong yen hit exporters.

However, Sydney edged 0.13 percent higher, adding 7.25 points to 5,412.3, while Seoul gained 0.14 percent, or 2.74 points, to 1,993.59.

Hong Kong was flat, edging down 18.50 points to 23,300.67. Shanghai added 0.74 percent, or 15.26 points, to 2,085.98 following more upbeat data on the world's number two economy last week.

Investors are nervously tracking events in Iraq as Islamic militants sweep through the country, taking over key cities and moving towards Baghdad as the US-trained Iraqi army crumbles.

US President Barack Obama raised the prospect of air strikes on the militia, saying his national security team "is looking at all the options". But while an aircraft carrier group has been deployed to the Gulf, he has ruled out any return of combat troops.

Washington is also preparing to hold talks with Iran to try to resolve the crisis, a report said, as the US condemned a "horrifying" massacre by Islamic militants of hundreds of Iraqi soldiers.

On Wall Street on Friday, the Dow rose 0.25 percent, the S&P 500 added 0.31 percent and the Nasdaq put on 0.30 percent. However, the indexes were all lower over the week.

Oil prices were mixed after surging last week on concerns about supplies from Iraq, a key exporter. In afternoon trade, US benchmark West Texas Intermediate rose 44 cents to US$107.35, its highest since September. Brent crude was down 48 cents at US$113.02.

In foreign exchange trade the dollar dropped to 101.90 yen from 102.04 yen in New York on Friday, while the euro was at 137.80 yen, against 138.16 yen in New York.

The single currency was also at US$1.3523 compared with US$1.3538.

The pound broke US$1.70 for the first time since August 2009. The jump to US$1.7012 came after two sessions of rises since governor Mark Carney on Thursday hinted that the BoE could soon tighten monetary policy as the economy shows signs of improving.

Some analysts are speculating that rates will be raised before the end of the year.

While attention turns to events in the Gulf, traders will be closely watching a US Federal Reserve meeting that ends on Wednesday, looking for a fresh handle on the world's largest economy.

The price of gold, a safe haven commodity, switched upwards, fetching US$1,281.90 an ounce at 0800 GMT compared with US$1,272.04 late Friday.

In other markets:

-- Bangkok rose 1.09 percent, or 15.83 points, to 1,471.85.

-- Jakarta lost 0.84 percent, or 41.20 points, to close at 4,885.46.

-- Kuala Lumpur fell 0.27 percent, or 5.16 points, to close at 1,876.74.

-- Manila slipped 0.39 percent, or 26.50 points, to 6,758.45.

-- Mumbai lost 0.15 percent or 37.69 points to close at 25,190.48 points.

-- Taipei was flat, edging up 6.54 points to 9,202.93.

-- Singapore fell 0.09 percent, or 2.99 points, to 3,290.26.

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