TOKYO (Reuters) - Asian
shares skidded on Monday as investors awaited data this week that could provide
more evidence of a slowdown in China, while the dollar gave back a little of
its recent gains.
The downbeat mood was
expected to continue into European trading, with financial spreadbetters
predicting Britain's FTSE 100 (.FTSE) to open 24 to 25 points lower, or down as
much as 0.4 percent; Germany's DAX (.GDAXI) to fall 50 to 51 points, or as much
as 0.5 percent; and France's CAC 40 (.FCHI) to drop 20 to 22 points, or as much
as 0.5 percent.
"The post-Scottish
referendum rally is quickly fading throughout Europe this morning with major
indices looking to open lower following a flat finish last week in the US and
China fears giving Asian markets a poor start to the week," Jasper Lawler,
market analyst at CMC Markets, said in a note to clients.
China's flash manufacturing
PMI reading on Tuesday could come in below the 50 level, indicating that
manufacturing activity is contracting.
"The psychological
effect of a below-50 reading will be significant and consistent with the slew
of softer Chinese data over recent weeks." Mitul Kotecha, head of FX
strategy Asia-Pacific for Barclays in Singapore, said in a note to clients.
China will not dramatically
alter its economic policy because of any one economic indicator, Finance
Minister Lou Jiwei said on Sunday, in remarks at a meeting of finance ministers
and central bank chiefs from the Group of 20 nations who met in the Australian
city of Cairns. His remarks came days after many economists lowered growth
forecasts having seen the latest set of weak data.
The G20 leaders said they
were close to adding an extra $2 trillion to the global economy and creating
millions of new jobs, but Europe's extended stagnation remained a major
stumbling block.
MSCI's broadest index of
Asia-Pacific shares outside Japan .MIAPJ0000PUS dropped about 1 percent.
Japan's Nikkei stock average (.N225) ended down 0.7 percent, after it marked
its highest closing level since 2007 on Friday and gained 2.3 percent last
week.
Investors booked gains in
heavyweight Softbank (9984.T) after the listing of Alibaba Group Holding Ltd
(BABA.N) Softbank, which holds a 32 percent stake in Alibaba, had surged 30
percent over the past six weeks in anticipation of the Chinese e-commerce
company's listing in the New York Stock Exchange.
Alibaba ended up 38 percent
at $93.89 on massive volume on Friday. Because its stock is traded on the New
York Stock Exchange and is not an S&P 500 component, its gains were not
reflected in major indexes and it did little to help an otherwise lacklustre
day on Wall Street.
The dollar gave up 0.2
percent against a basket of major currencies to 84.565 .DXY, after the index
posted its 10th consecutive week of gains on expectations that U.S. interest
rates would rise more quickly than had been expected.
The Federal Reserve should
start raising U.S. interest rates in the spring, earlier than many investors
currently expect, and should do so both slowly and gradually, Dallas Federal
Reserve Bank President Richard Fisher said in an interview on Fox Business
Network on Friday.
But the outlook for U.S.
monetary policy remains murky. The Fed issued a policy statement at the close
of last week's two-day meeting that suggested the first rate hike wasn't due
until around the middle of next year.
The greenback eased about 0.2
percent against its Japanese counterpart to 108.87 yen JPY=, moving away from a
six-year high of 109.46 yen scaled on Friday.
The euro EUR= rose 0.3
percent on the day to $1.2864, after drifting down to touch a fresh 14-month
low against the dollar of $1.2826 early on Monday.
Sterling added about 0.4
percent to $1.6343 GBP=D4 after it soared on Friday following Scotland's vote
to reject independence.
Spot gold XAU= shed 0.3
percent to $1,212.40. Last week, gold posted a 1 percent drop for its third
consecutive weekly fall.
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