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Global Markets: Asia stocks pull back as investors eye new risks; oil higher

Reuters  |  TOKYO 

By Shinichi Saoshiro

(Reuters) - Asian stocks pulled back on Tuesday, brushing off a firmer Wall Street lead and pausing a recent rally, as investors remained cautious about key economic and political risks, while supply concerns kept prices near 3-1/2-year highs.

MSCI's broadest index of shares outside dipped 0.65 percent after rising the previous day to its highest since late March. The index had rallied for three straight sessions prior to Tuesday.

"The markets appear to be taking a breather after their recent surge, awaiting fresh developments in matters such as U.S.-trade issues and Washington's upcoming summit with North Korea," said Yoshinori Shigemi, at in

Australian stocks were down 0.35 percent after briefly touching a four-month high and South Korea's shed 0.55 percent. Japan's Nikkei was a shade lower, its surge to a three-month peak bogging down.

Hong Kong's Hang Seng lost 0.5 percent, pulling back from a two-month peak to snap a five-day winning run and inched up 0.05 percent.

Investors in Chinese equities will likely re-jig their exposure after MSCI, the U.S. index publisher, published its latest index weighting.

said on Tuesday that 234 Chinese large caps will be partially included in its global and regional indexes on June 1, following an index review ahead of China's inclusion in MSCI's widely tracked equity benchmarks.

Wall Street scraped out gains on Monday after weakness in defensive stocks offset optimism following U.S. Donald Trump's conciliatory remarks toward China's that helped calm U.S.-trade tensions.

While sometimes raise inflation concerns, the surge - Brent has risen 17 percent so far in 2018 - was seen to be generally supportive for equities.

"The recent rise in prices of won't have a broadly negative impact on equity markets if it continues at the current pace," said Masahiro Ichikawa, at in

"The rise in is boding well for certain stock sectors like "

Brent crude added 4 cents to $78.27 a barrel and in close reach of $78.53, the 3-1/2-year high marked on Monday. U.S. advanced 0.4 cents to $71.00 a barrel and in reach of $71.89, the highest since November 2014 scaled on Thursday.

received their latest lift as OPEC reported that the global has been virtually eliminated. Tensions in the and uncertainty about output from amid renewed U.S. sanctions have contributed to the recent rise in oil prices.

"The commitment of and the rest of OPEC to the production cuts is a major factor in supporting the price at the moment as well as the possibility of reduced exports from due to sanctions," said William O'Loughlin, at

In currencies, the dollar index against a basket of six major currencies nudged up 0.05 percent to 92.643.

The greenback took a knock against the euro earlier on Monday after policymaker said the ECB could give fresh timing guidance of its first rate hike as the end of its exceptional bond purchases approaches.

The U.S. currency managed to bounce back, however, after reiterated support for gradual interest rate increases.

The euro stood little changed at $1.1933 after pulling back sharply from the previous day's high of $1.1996.

The dollar was a shade higher at 109.745 yen, adding to the previous day's gains.

The currency drew support as yields rose amid the easing of U.S.-trade tensions.

The 10-year Treasury note yield was at 2.998 percent after rising about 2.5 basis points overnight.

(Reporting by Shinichi Saoshiro; Additional reporting by in Singapore; Editing by and Sam Holmes)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Tue, May 15 2018. 08:40 IST