Asia stocks dip, euro pushes higher before ECB

Asia stocks dip, euro pushes higher before ECB

Hong Kong: Asian stocks slipped for a sixth straight day on Thursday as investors cut exposure to risky assets on signs the global economy is losing steam, with higher oil prices casting a shadow after Opec failed to reach a deal to boost output.

The share drop was mild following a drop on Wall Street. Japan’s Nikkei average and the MSCI index for Asia-Pacific shares outside Japan both slipped 0.3%.

The Federal Reserve’s beige book summary of economic conditions confirmed that the economy slowed in May due to higher gasoline prices and the supply chain disruptions following Japan’s earthquake and tsunami in March.

But the report, prepared for the Fed’s next policy meeting later this month, gave few indications of a sharp slowing, with some regions citing ongoing improvement in the job market and even a pick up in economic growth.

Economists at Goldman Sachs said that after taking account of the temporary factors that dented growth in May, it appears the US economy is showing surprising weakeness even while the global economy appears to be holding up.

“US growth may be softer than we thought at the start of the year," said Goldman’s economists in a note to clients. “However, it is less clear that the same is true elsewhere around the world."

The dollar fell back towards a one-month low struck earlier in the week. The dollar index , a gauge of its performance against six major currencies, was down 0.2% at 73.814.

The euro edged up 0.3% to $1.4620 before a European Central Bank policy meeting later in the day at which the ECB is expected to lay the groundwork for a rate hike in July, responding to higher inflation.

A slew of data showing the US and other major economies weakened last month has taken a bite out of stocks and other riskier assets, leaving market players scrutinizing upcoming data releases for clues on whether global growth is slowing more than expected.

The Australian dollar slid after data showing employment rose only 7,800 in May, well below forecasts of a 25,000 increase and further dousing expectations the country’s central bank will resume its monetary tightening campaign in coming months.

The Aussie shed 0.5% to $1.0570 and hit a four-month low against the resurgent New Zealand dollar .

New Zealand’s central bank held rates steady on Thursday but also set the stage for higher rates, saying rate hikes were needed as the economy bounces back from the Christchurch earthquake.

Oil prices extended gains after Opec failed to reach a deal to increase output, raising fears of supply shortfalls later this year which could push fuel prices higher.

Brent crude oil futures edged up 15 cents to $118.00 a barrel after jumping more than a dollar on Wednesday.