Asian shares skid as Fed monetary meeting looms

Asian shares began the week on a plaintive note amid losses on Wall Street and worries over China, while investors braced for a Federal Reserve meeting that might take another small step toward lifting U.S. interest rates.

Financial spreadbetters expected Britain's FTSE 100 0.3% lower, Germany's to open 0.4% down, and France's CAC 40 to open 0.3% lower. UBS's stronger-than-expected results may help markets.

Japan's Nikkei slipped more than 1 percent, while MSCI's broadest index of Asia-Pacific shares outside Japan fell 1.4%.

In China, the CSI300 index of the largest listed companies in Shanghai and Shenzhen fell 3%, with sentiment still soured by a poor PMI manufacturing survey.

"A rapid, post-rout rebound in mainland 'A' shares has ended, and the market has entered a stage of fluctuations, with investor sentiment increasingly unsteady," fund manager Yang Delong at China Southern Asset Management wrote to clients.

Australia's main index was up 0.2% but mining stocks struggled with the slump in global commodity prices.

Both copper and the Thomson Reuters CRB commodities index hit their lowest in six years. Early Monday, copper futures were off another 0.1 percent.

The Fed's policy-setting Open Market Committee meets on Tuesday and Wednesday and is considered highly unlikely to lift interest rates just yet, though it does still seem set on a move in September.

Trading volume has shrunk recently due to the northern hemisphere summer break exacerbating market moves. For example, turnover in Hong Kong stocks on Friday was below 80 billion Hong Kong dollars ($10.3 billion), less than half of 200 billion seen earlier this month.

"We expect Fed voters to pull the trigger in September, but for the path to interest rate normalisation to be a long one given the global risk profile, the lack of inflationary pressure, and concerns over what moving too quickly may do to asset markets, particularly the dollar, and the wider economy,"

said analysts at Australia and New Zealand Banking Group.

Expectations of a hike have slowly pushed up U.S. Treasury yields and widened the dollar's premium over the euro. Yields on two-year U.S. notes are around 90 basis points more than German debt.

The common currency was a shade firmer at $1.10070 on Monday, but not far from recent lows around $1.0810.

The dollar was 0.1 percent lower against a basket of currencies at 97.035. It was broadly steady on the yen at 123.48 having spent the past few sessions wandering between 123.54 and 124.48.

A first estimate of US economic growth for last quarter is due on Thursday and is expected to show a rebound of 2.7% annualised, from the first quarter's weather-induced contraction.

The Dow ended Friday down 0.92 percent, while the S&P 500 lost 1.07% and the Nasdaq 1.12% . For the week, the Dow fell 2.9% while the S&P 500 lost 2.2% and the Nasdaq 2.3%.

Wall Street has been weighed in part by concerns that a high U.S. dollar and sluggish global demand was pressuring corporate profits, a theme that should wend its way through this week's busy diary of earnings.

As well as blue-chip names such as Pfizer and Exxon Mobil, there are a range of social media stocks that have led the market so far in 2015 including Facebook, Cigna, Twitter and LinkedIn.

Brent crude oil was quoted 7 cents lower at $54.55 a barrel and near its lowest since March. U.S. crude was off 21 cents at $47.93.

Gold seemed to have steadied after its recent slide, with spot bullion at $1,097.90 an ounce.

($1 = 7.7504 Hong Kong dollars)