Asian shares weaken ahead of Chinese data

Asian shares weaken ahead of Chinese data

TOKYO - Asian shares slipped slightly on Thursday as investors looked to a run of Chinese economic indicators due later in the day, while Wall Street shares ended a five-day winning streak as falling oil prices hurt energy stocks.

MSCI's broadest index of Asia-Pacific shares outside Japan ticked down 0.1 per cent with resource-heavy Australian shares falling 0.5 per cent.

Japan's Nikkei fell 0.3 per cent after big gains in the previous two sessions on expectations that Prime Minister Shinzo Abe will postpone a planned tax hike next year to support the economy.

China industrial output, investment and retail sales data is expected to show a cooling in the world's second largest economy, with fixed-asset investment, an important driver of growth, seen growing at its slowest pace in nearly 13 years between January and October.

The oil market showed no sign of a rebound after five-months of decline, with Brent crude futures hitting a four-year low of $79.72 per barrel.

Saudi Arabia's oil minister did not make clear on Wednesday whether the kingdom would support a cut in oil production at the OPEC meeting on Nov. 27, even as he dismissed talk that the country is engaged in a "price war" with fast-growing US shale or other rival producers.

Even rising tensions in Ukraine did not lift oil prices. Ukraine said on Wednesday it was redeploying troops in the east because of fears that separatists will launch a new military offensive. Russia denies it has sent troops to reinforce the rebels.

As lower oil prices dragged on US energy stocks, the S&P 500 lost 0.1 per cent on Wednesday.

Still, as the fall in energy prices is easing inflationary pressures globally, allowing central banks to adopt looser monetary policy and eventually support risk asset prices, said Nobuhiko Kuramochi, strategist at Mizuho Securities.

"In Asia, countries such as Vietnam and South Korea have cut rates, so did Sweden... Given the disinflationary trend worldwide, we could see more central banks easing, which should support the global economy," he said.

In the currency market, sterling fell to a 14-month low of $1.5760 after the Bank of England's view on weak domestic inflation pushed back expectations on the timing of an interest rate hike into late 2015.

The dollar held firm against other currencies on the prospects of solid growth in the Unites States, though it lacked momentum as its failure to gain on a fairly upbeat US jobs data last week has prompted traders to lock in recent gains.

The dollar index stood at 87.840, off Friday's four-year peak of 88.190.

Against the yen, the dollar traded at 115.57 yen, just below the seven-year high of 116.11 hit on Tuesday. The euro fetched $1.2434, off Friday's two-year low of $1.2358.

Gold stood at $1,160.69 per ounce, above Friday's 4 1/2-year low of $1,131.85.

 

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