Asian shares steady, but set for weekly losses as global growth fears nag

Asian shares steadied on Friday after losses earlier in the week, but China jitters and global growth concerns weighed on investors' minds, while the dollar sat near a three-week high.

European shares also looked set to rise on opening with pan-region Euro Stoxx 50 futures up 0.61% and FTSE futures 0.41% higher.

MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.12% on Friday but was set to finish down 2.7% on the week, which would be its worst week in four.

"We're looking at a market that is nervous, though hasn't seen sentiment turn outright bearish," said Kyle Rodda, an analyst at IG markets.

"If you look for catalysts that could justify the next move to the upside in equities and risk assets, they are nowhere to be seen because global growth concerns are keeping investors on edge."

Hong Kong's Hang Seng Index rose 0.23% with traders looking for oversold stocks after the benchmark posted its lowest close in 10 months the day before, as the saga around China Evergrande Group lurched towards a conclusion.

The embattled property developer's shares dropped a further 11.8% on Friday, down 35% this week but there were gains elsewhere, including in technology stocks. The previously bruised Hang Seng Tech Index rose 2.8%, on track for its best day in three-and-a-half weeks.

Australian shares fell 0.8%, as a fall in iron ore prices hurt miners, but Chinese blue chips edged up 0.58% and Japan's Nikkei gained 0.62% to head back towards a 31-year high hit on Monday.

U.S. stock futures, the S&P 500 e-minis, were up 0.7%.

Chinese data earlier this week suggested growth in the world's second-largest economy will slow in the second half of this year, while economists polled by Reuters said they expected the U.S. economic rebound to have been dented in Q3, partly on the spread of the Delta coronavirus variant.

Respondents to that poll also pushed back expectations for the U.S. Federal Reserve to announce a tapering of asset purchases to November.

This means next week's Fed policy meeting is likely less consequential than would have been expected a few months ago when many investors felt a September tapering announcement was an option, but traders will be still watching closely for any policy clues from the meeting, especially after the U.S. posted an unexpected increase in August retail sales on Thursdsay.

Also due next week is a policy meeting of Indonesia's central bank, but all 25 analysts surveyed by Reuters expected Bank Indonesia will keep its key interest rate steady.

The dollar held onto its overnight gains in Asian hours on Friday, having been supported by the strong retail data while the yield on benchmark 10-year Treasury notes was 1.3362% little changed from its U.S. close of 1.331%, after also rising on the data.

The dollar index stood at 92.849, near Thursday's three-week high of 92.965

Gold recovered somewhat with the spot price trading at $1,761 per ounce, up 0.45% after falling 2.3% on Thursday as higher yields hurt the non-interest bearing metal. [GOL/]

U.S. crude dipped 0.26% to $72.42 a barrel, and Brent crude fell 0.21% to $75.50 per barrel, as more supply came back online in the U.S. Gulf of Mexico following two hurricanes, but both are still set to post weekly gains.

 

(Reporting by Alun John; editing by Richard Pullin and Lincoln Feast.)