Asia shares skid; oil surges on Yemen escalation

SYDNEY (Reuters) - Asian shares slipped on Thursday as tensions in the Middle East and losses on Wall Street soured sentiment, while the dollar's bull run looked to have stalled for the time being.

Risk appetite took a knock from news Saudi Arabia and its Gulf Arab allies had launched air strikes in Yemen against Houthi fighters who have tightened their grip on the southern city of Aden.

The potential threat to oil supplies from the Gulf was enough to lift U.S. crude US$2.26 to US$51.47, while Brent crude surged US$2.47 to US$58.95 a barrel.

Safe haven U.S. Treasuries also rose, nudging 10-year yields down to 1.92 per cent, while gold touched a three-week top around US$2,000 an ounce.

A dearth of Asian data meant the path of least resistance was for stocks to fall. The MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.6 per cent.

Australia's main index shed 0.9 per cent, while the Nikkei lost 1.6 per cent in its biggest daily decline since mid-January. Chinese markets, as so often, went their own way and Shanghai rose 1.2 per cent.

On Wall Street, a drop in technology stocks had knocked the Nasdaq down 2.37 per cent for its biggest decline in nearly a year. The Dow fell 1.62 per cent, while the S&P 500 lost 1.46 per cent.

Not helping was data showing spending on U.S. durable goods fell for a sixth straight month in February, fresh evidence that economic growth slowed sharply early in the year, due in part to bad weather.

That was just the latest in a run of soft U.S. indicators, a contrast to Europe where the news has been getting better.

JPMorgan noted that the gap between downward surprises on U.S. data and upward surprises on EU figures was at its widest since February last year when bad weather was also having a chilling effect on U.S. growth.

In currency markets, the US dollar continued to consolidate after wild swings last week. Measured against a basket of currencies, the dollar eased 0.2 per cent to 96.787, just above a three-week trough of 96.387 set on Tuesday. Earlier this month, it scaled a 12-year peak of 100.390.

The euro was last at US$1.0975, well off a 12-year trough of US$1.0457 plumbed two weeks ago. Against the yen, the dollar softened to 119.32, again just above a one-month trough of 119.22 set on Tuesday.