Singapore and other Asian shares drift lower as investors await key Fed meeting

TOKYO (Reuters) - Singapore and other Asian shares wobbled in early trade on Tuesday, with investors cautious ahead of the U.S. Federal Reserve's two-day meeting and as oil prices extended declines.

The Straits Times Index was down 17.88 points or 0.55 per cent at 3,208.23 at 9:30am.

The Fed is expected to announce the completion of its quantitative easing programme after a two-day meeting starting later in the session and will likely reinforce its stated willingness to wait a long while before hiking interest rates after a volatile month in financial markets.

"With the end of the asset purchase programme a foregone conclusion, speculation is once again mounting about the movement of interest rates," said Evan Lucas, market strategist at IG.

Data on Monday showed U.S. services sector activity slowed in October to a six-month low, while manufacturing output in Texas decreased, providing more evidence that the Fed has reason to wait before raising U.S. interest rates.

MSCI's broadest index of Asia-Pacific shares outside Japan inched down about 0.1 per cent in early trade, after a lacklustre session on Wall Street.

Japan's Nikkei stock average edged down about 0.2 per cent, despite upbeat economic data released before the market open.

Japanese retail sales in September rose 2.3 per cent from a year earlier, government data showed, suggesting consumer spending is gradually picking up.

The U.S. dollar edged higher after slipping overnight on expectations of more dovish comments from the Fed.

The US dollar crawled about 0.1 per cent higher to 107.87 yen , but remained below Monday's nearly three-week high of 108.38.

It was steady on the day against the euro at US$1.2701.