Diwali brings cheer to markets in Braj Mandal

Agra/Mathura/Vrindavan, Nov 3 (IANS) Sri Krishna's land Braj, comprising Agra, Mathura, Vrindavan, Hathras and Aligarh districts, is on a new high this Diwali with markets flooded with gift packets and Chinese lights Sunday. The sweet shops are virtually swamped with demands for the large variety of sweets lining the sale-counters.

"The markets and the busy lanes are choked with people and vehicles. It's one massive traffic jam all over Agra," said advocate Rajvir Singh, grumbling after he had to return without purchasing anything from Raja ki Mandi market in Agra.

Even when there is no space for movement or parking, people are buying vehicles.

"God knows from where the money is coming and they all keep wailing about price rise and financial crunch," Rajvir Singh told IANS. Market reports in Agra said that in just two days before Diwali, sales of all products had crossed Rs.400 crore.

In Mathura, the main market from Dwarkadheesh Temple to Holi Gate is dazzling with lights and a striking range of consumer products are being attractively displayed to lure consumers.

Vrindavan is buzzing with intense emotional buildup as Sri Krishna's devotees not only from India but hordes of foreigners have been making a beeline to various religious sites associated with Sri Krishna folklore.

The Braj Chaurasi Kos Yatra, covering a distance of almost 200 km on foot around Mathura, with a record number of pilgrims this year, is on. The religious fervour in Goverdhan, the holy hill town, 25 km from Mathura, is at its peak with preparations for religious meal-ceremonies Annakoot and Chhappan Bhog in full swing.

District authorities in Mathura are particularly anxious after reports of a massive influx of pilgrims expected for the ritualistic Yamuna Snan on Yam Dwitiya Parva, two days after Diwali. Brothers and sisters jointly take a holy dip in the river to be free of the shackles of Yamraj whose sister is Yamuna.

Meanwhile, expecting a huge Diwali rush, the state-run roadways corporation has made additional arrangements for transportation, deploying hundreds of buses to ferry pilgrims between Agra, Mathura and Vrindavan on Diwali.

The market for jewellery, clothes and other consumer durables has picked up momentum after a dull start last week. Sweet and gift shops are working overtime.

This year there has been a great demand for home-made chocolates. A large number of women entrepreneurs have entered this field. The Agra jail's petha retail counter is also doing brisk business.

"One good reason for the upbeat market this time is that the festival falls in the first week when pockets are flush with salaries and additional incomes," explains Bankey Lal Maheswari of Sri Nath Textiles in Johri Bazar close to Agra Fort.

The tourist inflow is steady. "But the same day return (to Delhi) due to the Yamuna Expressway, has hit smaller hotels," says hotelier Sandeep Arora.

The Diwali momentum has also hit the smaller towns on the periphery.

"With rain gods smiling this year, the crops have been good and the prices of agricultural commodities have remained largely stable and profitable for the cultivators, which means more money in the kitty for Diwali purchases. Looks like everyone's going for new mobiles, electronic goods, even computers," says Shravan Kumar Singh, a social activist.

The only segment reporting dull business is real estate.

"Full page advertisements have been placed in local newspapers for flats and complexes from Vrindavan to Firozabad but the demand is just not there. All kinds of fancy schemes are latched to booking of flats but still buyers are hard to find," says real estate agent Vinod Kumar.

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Markets closed on Monday for public holiday

MUMBAI (Reuters) - Indian stock, debt and currency markets are closed on Monday for a public holiday. Trading will resume on Tuesday.

The BSE Sensex rose 0.2 percent on Friday, after earlier hitting a record high of 21,293.88 points, which surpassed the previous record set on January 10, 2008. The broader Nifty rose 0.1 percent.

The benchmark 10-year bond yield closed 8 basis points higher at 8.70 percent, while the partially convertible rupee closed at 61.74/75 per dollar compared with 61.50/51 on Thursday.

(Reporting by Mumbai markets team)

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Global Markets - Euro on the ropes after dive in inflation

By Marc Jones

LONDON (Reuters) - The euro tumbled to a two-week low on Friday after a plunge in euro zone inflation left markets suddenly eyeing the possibility of an interest rate cut by the European Central Bank next week.

European shares saw a subdued end to what looked to be a fourth week of gains, but the combination of Thursday's surprise dive in inflation to just 0.7 percent and a revitalised dollar kept the main focus on the fragile euro.

After its biggest fall in six months in the previous session, the shared currency shed a further 0.6 percent to $1.3513, leaving it flirting with its biggest weekly drop since July last year.

"It is clear that there has been a major sentiment change on the euro," said John Hardy, head of FX strategy at Saxo bank in Copenhagen.

"The ECB's single mandate has always been on inflation so this gives Draghi and co further reason to do something at next week's meeting. We see considerable further downside, the likes of euro/dollar back into the old range, down towards $1.30."

A handful of big banks including UBS, RBS and Bank of America/Merrill Lynch revised their calls saying they now expect a rate cut next week and the pressure on the euro increased after banks made their biggest repayment of ECB crisis loans since April.

The move was also amplified as the dollar continued to kick away from a recent nine-month low, boosted by upbeat U.S. data overnight that added to the debate on future Fed stimulus.

U.S. S&P E-mini futures edged up about 0.2 percent, pointing to a slightly higher start on Wall Street, after the S&P 500 Index closed down about 0.4 percent on Thursday but still gained 4.5 percent for the month.

Stock markets across Europe were between flat and down 0.5 percent ahead of the U.S. restart, pegged back by signs of third-quarter weakness at some major European firms.

At the same time, the return of bets on an ECB rate cut saw euro zone government bonds extend this week's gains.

TAPER TALK

Markets' focus remains heavily on U.S. monetary policy and how soon the Federal Reserve will begin tapering back its $85 billion a month support programme, having delayed a move in September.

The ISM survey of manufacturing for October will give investors the latest temperature reading on the state of the U.S. economy after some upbeat PMI data on Thursday.

"If the ISM report is better than expected, it could add to revived tapering expectations, and U.S. yields and the dollar could go up and stocks could go down," said Masashi Murata, senior currency strategist at Brown Brothers Harriman in Tokyo.

Not all players are convinced that this week's U.S. newsflow heralds a shift in monetary policy expectations, given the disruption caused by last month's Federal shutdown.

"The existence of noise in the October data will likely make it difficult for the Fed to gather enough evidence to start tapering in December," strategists at Barclays said in a note.

CHINA REASSURES

In Asian trading, reassuring signals on China's factory activity offered support to the region's markets, though Tokyo's Nikkei finished at a one-week low as the yen strengthened against the euro.

Among commodities, gold dropped to $1,313 an ounce leaving it at its lowest in nearly two weeks, hurt by sharp losses in the previous session from month-end profit-taking, the strong U.S. economic data and the higher dollar.

Copper got a lift from the China data, rising to $7,282 a tonne and back toward a one-week peak of $7,300 hit on Thursday. But it was not enough to help oil, with Brent falling back to $107.8 a barrel as U.S. crude slid to $95.72.

"There were reports that some of the ports in Libya were reopening and any signs that that oil is coming back online is going to hit the oil price," said Abhishek Deshpande, oil market analyst for Nataxis in London.

"There are also signs of generally lower season demand for oil at the moment as China's refineries go into maintenance."

(Additional reporting by Lisa Twaronite in Tokyo; Editing by Patrick Graham and Susan Fenton)

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Global Markets - Euro on the ropes after dive in inflation

By Marc Jones

LONDON (Reuters) - The euro tumbled to a two-week low on Friday after a plunge in euro zone inflation left markets suddenly eyeing the possibility of an interest rate cut by the European Central Bank next week.

European shares saw a subdued end to what looked to be a fourth week of gains, but the combination of Thursday's surprise dive in inflation to just 0.7 percent and a revitalised dollar kept the main focus on the fragile euro.

After its biggest fall in six months in the previous session, the shared currency shed a further 0.6 percent to $1.3513, leaving it flirting with its biggest weekly drop since July last year.

"It is clear that there has been a major sentiment change on the euro," said John Hardy, head of FX strategy at Saxo bank in Copenhagen.

"The ECB's single mandate has always been on inflation so this gives Draghi and co further reason to do something at next week's meeting. We see considerable further downside, the likes of euro/dollar back into the old range, down towards $1.30."

A handful of big banks including UBS, RBS and Bank of America/Merrill Lynch revised their calls saying they now expect a rate cut next week and the pressure on the euro increased after banks made their biggest repayment of ECB crisis loans since April.

The move was also amplified as the dollar continued to kick away from a recent nine-month low, boosted by upbeat U.S. data overnight that added to the debate on future Fed stimulus.

U.S. S&P E-mini futures edged up about 0.2 percent, pointing to a slightly higher start on Wall Street, after the S&P 500 Index closed down about 0.4 percent on Thursday but still gained 4.5 percent for the month.

Stock markets across Europe were between flat and down 0.5 percent ahead of the U.S. restart, pegged back by signs of third-quarter weakness at some major European firms.

At the same time, the return of bets on an ECB rate cut saw euro zone government bonds extend this week's gains.

TAPER TALK

Markets' focus remains heavily on U.S. monetary policy and how soon the Federal Reserve will begin tapering back its $85 billion a month support programme, having delayed a move in September.

The ISM survey of manufacturing for October will give investors the latest temperature reading on the state of the U.S. economy after some upbeat PMI data on Thursday.

"If the ISM report is better than expected, it could add to revived tapering expectations, and U.S. yields and the dollar could go up and stocks could go down," said Masashi Murata, senior currency strategist at Brown Brothers Harriman in Tokyo.

Not all players are convinced that this week's U.S. newsflow heralds a shift in monetary policy expectations, given the disruption caused by last month's Federal shutdown.

"The existence of noise in the October data will likely make it difficult for the Fed to gather enough evidence to start tapering in December," strategists at Barclays said in a note.

CHINA REASSURES

In Asian trading, reassuring signals on China's factory activity offered support to the region's markets, though Tokyo's Nikkei finished at a one-week low as the yen strengthened against the euro.

Among commodities, gold dropped to $1,313 an ounce leaving it at its lowest in nearly two weeks, hurt by sharp losses in the previous session from month-end profit-taking, the strong U.S. economic data and the higher dollar.

Copper got a lift from the China data, rising to $7,282 a tonne and back toward a one-week peak of $7,300 hit on Thursday. But it was not enough to help oil, with Brent falling back to $107.8 a barrel as U.S. crude slid to $95.72.

"There were reports that some of the ports in Libya were reopening and any signs that that oil is coming back online is going to hit the oil price," said Abhishek Deshpande, oil market analyst for Nataxis in London.

"There are also signs of generally lower season demand for oil at the moment as China's refineries go into maintenance."

(Additional reporting by Lisa Twaronite in Tokyo; Editing by Patrick Graham and Susan Fenton)

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Asia markets take glancing hit from Fed, BOJ softens blow

By Wayne Cole

SYDNEY (Reuters) - Asian markets suffered a glancing blow on Thursday after the U.S. Federal Reserve's latest policy outlook was deemed less dovish than some had wagered on, lifting both bond yields and the dollar.

The damage was mostly superficial with MSCI's index of Asia-Pacific shares outside Japan off just 0.3 percent. Shares in Shanghai lost 0.7 percent while Japan's Nikkei eased 0.4 percent.

Helping sentiment was the Bank of Japan's decision to stick with its massive stimulus program that has shown tentative signs of breaking the grip of deflation.

Indeed, a survey of Japanese manufacturing out on Thursday showed activity accelerated to its fastest in more than three years in September.

There was also upbeat news from Australia where approvals to build new homes surged to their highest since early 2010, concrete evidence that record-low interest rates were working to support economic growth.

These factors helped lessen the drag from Wall Street, which had slipped after the U.S. central bank kept its $85 billion-a-month stimulus plan intact but did not sound quite as alarmed about the state of the economy as some had anticipated.

Given U.S. shares had reached record highs this week, the resulting profit-taking came as no surprise.

The Dow Jones industrial average fell 0.39 percent and the S&P 500 lost 0.49 percent. The MSCI world equity index showed even less damage, easing just 0.1 percent from a high not seen since January 2008.

Dealers said the market had talked itself into expecting the Fed would make dovish changes to the statement, so it was somehow considered "hawkish" when those did not materialise.

"We interpreted the statement as neutral and balanced and think the Fed is essentially in a holding pattern," said analysts at Australia and New Zealand Bank.

"If anything, the assessment section was a touch softer, suggesting the Fed are not trying to give the impression that it is setting up for a December move."

STILL EYEING MARCH

Much of the market is still not pricing in a start of tapering until March, when the Fed policy meeting will include new economic forecasts from officials and a news conference by Chairman Ben Bernanke.

It was notable that Fed funds futures barely budged on the statement, showing investors still did not expect any increase in official rates until well into 2015.

Likewise, short-dated Treasury yields stayed well anchored while the longer end moved up only modestly. Yields on the 10-year note were steady at 2.53 percent, and far below the 3 percent peak hit in early September.

Currency moves were also moderate, with the U.S. dollar edging further away from recent lows. The dollar index edged fractionally higher on the day to 79.814.

The euro dipped to $1.3713, losing gains made Wednesday after data showed a jump in euro zone sentiment in October. The dollar fared better against the yen to reach 98.44, a move that offered some support to Japanese stocks.

There was more action in the New Zealand dollar which bounced after the country's central bank said increases in interest rates were still likely to be needed next year, putting it well ahead of most other developed economies in tightening.

The currency rallied as much as half a U.S. cent in reaction, though the central bank also noted that a strong currency meant it might be able to wait longer before having to raise rates.

In commodities, spot gold faded after rising the most in a week at one stage on Wednesday. Gold fetched $1,338.73 an ounce, down from a high of $1,359.16.

Brent crude eased 25 cents to $109.61 a barrel but that followed gains on Wednesday as export disruptions in Libya continued to cut supplies to Europe and Asia.

The benchmark U.S. contract was off 22 cents at $96.55 a barrel after a bigger-than-expected increase in inventories in the United States.

(Editing by Eric Meijer)

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Asian markets seen cautiously firmer ahead of Fed statement

By Wayne Cole

SYDNEY (Reuters) - Asian share markets should take heart from record highs in U.S. stocks on Wednesday as investors wager the Federal Reserve will rock no boats at its policy meeting and leave stimulus in place for the next few months at least.

Australia was the first market to dip its toe in the water, gaining 0.5 percent, while MSCI's index of Asia-Pacific shares outside Japan was a shade firmer.

A mixed bag of U.S. economic data caused few frowns since it merely reinforced expectations the central bank will maintain to the status quo when its two-day policy meeting ends on Wednesday.

Even the U.S. dollar got a lift as dealers gauged the prospect of easy money for longer had now been pretty much discounted following two months of losses.

Markets seem to be operating on the assumption that the Fed's policy statement will not challenge the growing consensus that any tapering of its $85 billion of monthly asset purchases will not start until March at the earliest.

Such an outcome would be taken as justifying the rallies in stocks and bonds seen in recent weeks and might have only a limited impact on prices in the near term.

But it also means markets are vulnerable to a surprise.

"With expectations of taper firmly kicked into 2014 the risk that the FOMC could decide to move earlier looks asymmetrical," said Patrick Perret-Greene, an analyst at Australia and New Zealand Bank.

"If the Fed does nothing tomorrow then nothing really happens but if they do something or even hint at moves in the not too distant future the effects could be dramatic."

The Fed's decision is due at 1800 GMT, though divining its true message may be tricky as no new economic forecasts are released and nor will Chairman Ben Bernanke be giving a news conference.

BE BORING, PLEASE

For now, markets are hoping the Fed will be boring.

The Dow Jones industrial average ended Tuesday 0.72 percent higher at an all-time closing peak of 15,680.35.

The S&P 500 gained 0.56 percent aided further by a jump in heavyweight IBM after the company's board of directors approved another $15 billion for stock buy-backs.

Among the U.S. data, a measure of core retail sales showed surprising resilience in September, yet a grim survey of consumers highlighted the heavy toll the government shutdown had taken on the public mood.

MSCI's world equity index rose 0.25 percent On Tuesday, but remained within last week's trading range.

Having fallen steadily since the last Fed meeting, the U.S. dollar seems to have reached a bottom in the last few days.

The dollar index reached a one-week peak of 79.618, having climbed 0.5 percent on Tuesday. Just last Friday, it had plumbed a nine-month low at 78.998.

"Fed meetings have not been friendly to the USD this year, with the dollar weakening following every meeting in 2013 with the exception of June," analysts at BNP Paribas wrote in a client note.

"However, with markets already having adjusted to a much more dovish view on the Fed outlook, we think the USD is likely to hold up better this time."

The euro slipped to $1.3746, pulling further away from a 23-month peak of $1.3833 set just a few days ago.

Yields on the benchmark 10-year Treasury note were at 2.505 percent after dipping from a high of 2.5360 on Tuesday. The market has enjoyed a substantial rally in the past two months with yields falling all the way from 3 percent.

Spot gold edged back to $1,343.64 an ounce as the dollar gained, but is still up more than 7 percent from a three-month low hit mid-October.

U.S. crude oil was off 67 cents at $97.53 a barrel.. Traders termed this a consolidation after a sharp gain on Monday when reports of a sharp drop in Libyan oil exports rekindled worries over global supply.

(Editing by Eric Meijer)

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Authorities take punt on betting markets to fight fixing

By Sudipto Ganguly

MUMBAI (Reuters) - Snooker authorities believe monitoring international betting markets is the most crucial step towards curbing the menace of match-fixing, which rose to prominence recently with the banning of a leading professional.

Former world number five Stephen Lee was handed a 12-year ban last month relating to corruption in seven matches the Briton played in 2008 and 2009, including the UK and world championships. Lee is appealing the sentence.

"The point for me is if you are going to fix a match, normally it's for people to win money by betting," Nigel Mawer, chairman of the disciplinary committee of the World Professional Billiards and Snooker Association (WPBSA), told Reuters.

"So it's crucial that we can monitor betting markets worldwide. It gives us the opportunity to investigate."

Match-fixing has reared its ugly head time and again in more popular sports like soccer and cricket.

The scale of the problem facing the multi-billion dollar soccer industry was exposed in February when European police and prosecutors said hundreds of games may have been rigged by a Singapore-based syndicate.

Previously, three Pakistani cricketers were handed jail terms and bans for a fixing scandal surrounding a test against England at Lord's in 2010.

Former Scotland Yard detective Mawer believes one key approach to solving the issue is to maintain good working relationships with the gambling industry and the gambling commission in the United Kingdom.

"What that does mean is that often I will know if there's a movement in the betting market before a match is even being played," he said in a telephone interview.

"That's very useful because it gives us a chance at early intervention."

As professional snooker aims to gain popularity in new markets, the importance of monitoring betting industries outside Britain and putting in preventive measures has grown.

EXTEND COVERAGE

To suit those needs, the WPBSA tied up with Qatar-based International Centre for Sport Security (ICSS) last week.

"One of the most important thing that's going to come out of the partnership for us is that they will provide us with the ability to monitor betting worldwide which will extend our coverage," Mawer added.

The ICSS, which counts the European Professional Football Leagues and the International Ice Hockey Federation among its clients, has a team of investigators specialising in sports integrity and has sources in sports betting globally.

"As the sport gets more popular, there's more interest, it's more televised, there will be more betting on the sport and the risk will go up," Jake Marsh, an integrity consultant at ICSS, told Reuters.

"The more money gets involved there will be more chances of corruption."

The firm also monitors and collects information on the activities of international criminals who target and commit sport betting corruption or fraud.

Mawer is confident that the preventive measures, besides educating players, will suffice in curbing match-fixing.

His confidence stems from the fact that he has had to investigate only four cases of corruption since starting his role with the WPBSA in 2011.

"The Steven Lee case has sent shockwaves across snooker," he added. "But it helps players who have to make a decision if they have an approach.

"The Lee case will help them make the right decision and say no to an approach and build confidence in the players and I think now they will report if there were any approaches."

(Editing by John O'Brien)

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Asian stock markets fall, dollar near two-year low vs euro

By Dominic Lau and Vidya Ranganathan

TOKYO (Reuters) - A stronger yen depressed Japanese stocks on Friday, while the dollar was hemmed in near a two-year low against the euro by expectations the U.S. Federal Reserve will continue its monetary stimulus well into 2014.

Those expectations were tempered, however, by continued worries over tighter cash markets in China, leading to a lopsided and selective rally in Asian markets.

The Nikkei share average's 2 percent drop was also set to pressure European markets on Friday, financial bookmakers predicted.

Financial spreadbetters were forecasting falls in Germany and France as the region's equity indexes pause for breath after hitting fresh highs this week. They expected Britain's FTSE 100 to open almost unchanged but Germany's DAX was seen opening down by as much as 0.3 percent while France's CAC 40 was seen falling 0.4 percent.

In Asia, the Indonesian rupiah rallied nearly 2 percent against the weak dollar, but the Aussie was on the back foot. Aussie shares rose 0.3 percent, ending near the 5-year high of 5,402.4 hit earlier in the week.

Meanwhile, South Korean stock markets fell as investors braced for some profit-taking in a market that has seen record foreign buying for 40 consecutive sessions and has pushed the won to a two-year high this week.

The KOSPI index was down 0.8 percent even after Samsung Electronics Co Ltd, the index's largest component, said its quarterly operating profit surged 26 percent to a new record.

"A combination of foreign outflows and shadows of China liquidity concerns are dragging on the market," said Lee Kyung-soo, an analyst at Shinyoung Securities.

MSCI's broadest index of Asia-Pacific shares outside Japan eased 0.35 percent, reversing earlier slight gains. The index fell 0.1 percent on Thursday as rising Chinese money market rates countered signs of a pick-up in manufacturing.

Shanghai shares hit their lowest levels in a month, while Tokyo's stock market was set to suffer its first weekly drop in three weeks.

Although the Japanese quarterly earnings season is still at an early stage, 70 percent of the 10 Nikkei companies that have reported so far have missed market expectations, according to Thomson Reuters StarMine. That compared with 42 percent in the previous quarter.

U.S. S&P E-mini futures were flat in early trade. The S&P 500 index had advanced 0.3 percent on solid earnings and expectations that monetary stimulus will be in place for the foreseeable future after weak data.

U.S. manufacturing output fell for the first time in four years and the number of new claims for unemployment benefits fell less than expected last week.

DOLLAR WEAKNESS

The euro was up 0.1 percent $1.3815, not far from a two-year high of $1.3826 touched on Thursday and shrugging off data showing the pace of growth in euro zone business unexpectedly eased this month.

"The dollar will not rally without Fed tapering expectations rising again, but we would not chase EUR/USD higher here, as rate compression suggests the pair is unlikely to break much higher," Societe Generale analysts wrote in a note, saying they favoured Scandinavian and Antipodean currencies into year-end.

"Fed tapering expectations being pushed out into 2014 and further ECB easing early next year suggest a favourable policy environment for the FX carry trade. Throw in lower volatility and seasonality effects, and one has the perfect cocktail for the carry trade."

Yet the Antipodeans, the Aussie and New Zealand dollars, were nursing broad losses too as investors quit extended long positions in the two currencies.

The Aussie was settling around $0.9605, after touching a low of $0.9582. It had hit a 4-1/2-month peak of $0.9758 on Wednesday, but is on track for a loss of close to 1 percent for the week.

The kiwi was holding just above a 10-day low at $0.8310. It had also peaked during the week at a multi-month high, but now faces a weekly loss of more than 2 percent.

Against the yen, the dollar stood at 97.09, a shade off the two-week low of 97.15 yen hit on Wednesday.

The dollar index, which tracks a basket of major currencies, was little changed.

Gold paused for breath after climbing 1.1 percent on Thursday, while U.S. crude prices added 0.3 percent to about $97.35 a barrel, moving away from a 3-1/2 month low of $95.95 touched in the previous session.

(Additional reporting by Gyles Beckford in Wellington and Jungmin Jang in Seoul; Editing by Kim Coghill and Eric Meijer)

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European shares at five-year highs, Asian markets gain

By Richard Hubbard

LONDON (Reuters) - Global shares hovered at five-year highs on Monday while the dollar edged up against the yen as investors looked ahead to a deluge of U.S. data for clues on when the Federal Reserve will begin scaling back its stimulus.

Many in the markets think the Fed will be wary of trimming its $85 billion-a-month bond-buying programme, which has supported riskier assets like shares, until the economic impact of a 16-day partial U.S. government shutdown becomes clearer.

"We're opening with a slightly positive tone ..., on the back of last week's decision to extend (U.S. fiscal) deadlines which is seen pushing back tapering from the Fed, a view which continues to support risky assets," said Richard McGuire, senior rate strategist at Rabobank.

European shares touched a fresh five-year high in early trade, though moves were limited ahead of the U.S. data, which begins with home sales numbers on Monday and includes the keenly watched non-farm payrolls report on Tuesday.

Expectations the Fed would have to delay lifted the broad S&P 500 index to a record closing high on Friday, marking its best weekly gain in three months as stronger-than-expected corporate earnings added to the positive tone.

Asian shares outside Japan followed on with a 0.2 percent rise to reach a five-month high on Monday. Australia's S&P/ASX 200 also touched a five-year peak, helped in part by data last week showing an improvement in economic growth in China - Australia's biggest export market.

MSCI's world equity index, which tracks shares in 45 countries, was holding near its own fresh five-year high reached last week.

RISK ON

In the currency market the greater prospect of a Fed delay weighed on the dollar against most currencies, as it would act to keep rates on U.S. debt lower than those offered by other major nations.

However, the U.S. currency rose against the safe-havens of the yen and the Swiss franc on expectations for a strong jobs report.

Against a basket of six major currencies, the dollar was steady at 79.70 not very far from Friday's low of 79.478, its weakest point since February.

The dollar edged up 0.4 percent against the Japanese yen to 98.01 yen, though below its near three-week high of 99.01 yen set last Thursday.

While some investors positioned for a strong non-farm payrolls reading on Tuesday others said an outcome more in line with expectations would see a limited response as the market was likely to wait for the effect of this month's partial government shutdown on the U.S. economy to become clear.

"It's going to take a while before we get what policymakers would consider a clean set of data. It may not come through until December or January," said Ian Stannard, head of European foreign exchange strategy for Morgan Stanley.

As a result, investors will not be expecting the Fed to take any decision on tapering until next year, which is likely to favour higher-yielding currencies like the Australian and Canadian dollars, Stannard said.

"We're going to see over the coming weeks quite a positive environment, more of a risk-on environment, starting to develop," he said.

With the dollar under pressure and the Fed expected to keep pumping in money to support the U.S. economy, commodities like gold were enjoying renewed demand.

Gold edged up to near one-and-a-half-week highs around $1,320 an ounce on Monday, having already gained 3.4 percent last week. Silver outperformed gold, rising 1.4 percent at $22.18 an ounce.

Brent crude oil saw more muted reaction, dipping under $110 a barrel as investors were waiting for the resumption of U.S. oil data along with the other economic numbers.

The U.S. Energy Information Administration will release weekly oil data for the week ended October 11 later on Monday. Its normal release schedule will resume after that, and oil data for last week will be released on Wednesday.

"The market's just in a wait-and-see mode ... The thing on most traders' minds is what sort of story is going to be told by the U.S. data now that it's going to be released again," said Ric Spooner, chief market analyst at CMC Markets.

(Additional reporting by Marius Zaharia and Jessica Jaganathan; Editing by Susan Fenton)

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HDFC Q2 net up 10 pct helped by smaller markets

By Aditi Shah

MUMBAI (Reuters) - Housing Development Finance Corp Ltd (HDFC) , India's top mortgage lender, posted a 10 percent rise in net profit for the July-September quarter, and is betting on increased demand in smaller cities to boost growth in a slowing economy.

HDFC said it was on track to meet its lending growth target of 18 to 20 percent this fiscal year ending on March 31 despite rising inflation and high interest rates in Asia's third-largest economy, which is growing at its slowest pace in a decade.

"Our lending is more to middle-income people, more in the outskirts of big cities, or in tier 2 and tier 3 cities where the growth is still reasonably good," HDFC's chief executive officer, Keki Mistry, told Reuters on Monday.

India's growing middle-class population has been driving demand for homes, while luxury homes have been slow to take off.

In the first half of 2013, more than 65,000 housing units were launched for sale in the major cities, mainly in the secondary and peripheral markets and in the mid-income segment, compared with 48,000 units a year ago, a report by international property consultant CBRE showed.

Standalone net profit at HDFC for the fiscal second quarter was 12.66 billion rupees compared with 11.51 billion rupees a year ago, falling short of market estimates of 12.96 billion rupees according to Thomson Reuters I/B/E/S.

Total income rose 13 percent to 58.6 billion rupees, as its loan book grew 19 percent to 1.85 trillion rupees. HDFC's net interest margins, a measure of profitability, narrowed 10 basis points to 4.1 percent over the same period.

Shares in HDFC closed 0.2 percent higher at 821.15 rupees.

(Editing by Anupama Dwivedi)

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