TOKYO - Asian stocks fell on Friday following fresh signs of slowing Chinese growth, with energy stocks depressed across the region as crude oil hovered near a four-year low in an oversupplied market.
Spreadbetters expected the cautious mood in risk assets continuing into Europe, forecasting an effectively flat open for London's FTSE .FTSE, Germany's DAX .GDAXI and France's CAC .FCHI.
MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS slipped 0.3 per cent.
China's economy lost further momentum in October, with factory growth dipping and investment growth hitting a near 13-year low.
"As Federal Reserve policy shifts towards monetary tightening, the kind of risk aversion stemming from emerging markets we saw at the start of the year may take place again," said Junichi Ishikawa, a market analyst at IG Securities in Tokyo.
"The European Central Bank will play a key role in preventing such risk aversion. We may see instability continue in emerging markets until they are convinced that easing from the ECB and Bank of Japan can provide global support."
Tokyo's Nikkei, which has outperformed its Asian peers this week on expectations that Japanese Prime Minister Shinzo Abe will call an election in December and possibly delay a sales tax hike, was up 0.2 per cent after climbing to a fresh seven-year high. The index was on track for a weekly gain of 3.5 per cent.
"The pace of the rise is too fast - it can trigger decent profit-taking any minute," said Takatoshi Itoshima, chief portfolio manager at Commons Asset Management in Tokyo.
The dollar was up 0.3 per cent to 116.16 yen JPY= after scaling a new seven-year peak of 116.24 yen on the back of firmer Japanese stocks.
Many market participants, particularly foreign players, have sold yen to hedge their positions in Japanese equities.
Some participants were focused on whether Japan can evade accusations at a weekend summit of G20 leaders in Australia of devaluing the yen amid a weaker outlook for much of the global economy.
Investors also awaited euro zone third quarter GDP and US retail sales numbers due later in the day. ECONEZ ECONUS
The numbers may reinforce perceptions that the US economy is faring better than either Europe's or Japan's, raising the prospect of more monetary policy divergence that has been helping to push the dollar higher against the euro and yen.
The euro was down 0.4 per cent at $1.2429 EUR=, inching back towards a two-year low of $1.2358 struck last Friday.
US crude oil CLc1 was down 0.1 per cent at $74.17 a barrel after suffering a 3.9 per cent slump on Thursday, when it fell to a four-year low of $74.07.
Oil has been hit this week by factors including a stockpile surge at a delivery point for US crude and seeming reluctance by Saudi Arabia to cut output when the Organisation of the Petroleum Exporting Countries meets on Nov. 27. [O/R]
Crude prices have slumped more than 30 per cent since June.
"We've got a period of very heightened volatility in the lead-up to the November 27 OPEC meeting," said Mark Keenan, head of commodities research in Asia at Societe Generale in Singapore.