Asian shares ease after run of gains; US dollar, oil recover

People walking past an electric quotation board flashing the Nikkei key index of the Tokyo Stock Exchange (TSE) in front of a securities company in Tokyo.
People walking past an electric quotation board flashing the Nikkei key index of the Tokyo Stock Exchange (TSE) in front of a securities company in Tokyo.PHOTO: AFP

SINGAPORE (REUTERS) - Asian stock markets took a breather on Friday (Feb 17) from their recent surge as investors took profits, while the dollar inched up after Thursday's slide and optimism over possible renewed supply cuts by Opec lifted oil prices.

MSCI's broadest index of Asia-Pacific shares outside Japan pulled back 0.2 per cent, on track to end the week up 1.2 per cent, its fourth straight week of gains.

Until Thursday, the index surpassed its previous intraday high for seven consecutive sessions, and closed at 19-month highs in the past two.

A batch of positive economic data out of Asia this week, driven by improving exports and rising commodity prices, has bolstered shares, although concerns linger that any protectionist threats posed by US President Donald Trump could reverse the recovery.

Japan's Nikkei slid 0.7 per cent, set to close 0.9 per cent lower for the week. Australian shares were down 0.2 per cent, shrinking the week's gains to 1.4 per cent.

Overnight, Wall Street put in a mixed performance, with the Dow Jones Industrial Average barely eking out its sixth straight record high, while the S&P 500 and Nasdaq snapped a seven-day winning streak as investors paused their buying to digest recent gains.

"A soft lead from US markets and slightly weaker base metals prices suggest that the local market will take a wait-and-see attitude in early trade this morning," Ric Spooner, chief market analyst at CMC Markets, wrote in a note.

The US dollar edged up after posting its biggest one-day drop in more than two weeks on Thursday as uncertainty about the timing of the next Federal Reserve rate hike offset the impact of stronger economic data.

Manufacturing activity in the US Mid-Atlantic region surged to its highest in 33 years, housing data indicated a recovery in the sector was on track, and weekly jobless claims pointed to a labour market that continues to tighten.

But traders concluded that Fed Chair Janet Yellen's economic testimony before Congress on Wednesday didn't offer enough conviction that the central bank would raise rates at its next meeting in March.

The dollar index, which tracks the greenback against a basket of trade-weighted peers, added 0.1 per cent to 100.57, on track to end the week 0.2 per cent lower. It tumbled 0.7 per cent on Thursday.

The dollar gained almost 0.2 per cent early on Friday to 113.39 yen, up by the same percentage for the week. It lost about 0.8 per cent on Thursday.

The dollar's recovery pulled the euro lower, with the common currency edging back slightly to US$1.06675 on Friday, after Thursday's 0.7 per cent gain, set to end the week 0.2 percent higher.

Oil prices built on Thursday's gains on positive sentiment over reports that the Organization of Petroleum Exporting Countries may consider extending its oil supply-reduction pact with non-members and may even apply deeper cuts if inventories don't fall to a targetted level.

For now, that optimism appears to be winning the tug of war with concerns over a rise in US production, but that worry is set to leave oil prices with a weekly loss.

US crude added 0.1 per cent to US$53.43 a barrel in early Asian trade, but is headed for a decline of 0.8 per cent for the week.