Asian shares stumble on Wall Street losses, growth worries

Nikkei sheds 3.3%, while MSCI's broadest index of Asia-pacific shares outside Japan dropped 0.7%

Asian shares skidded today, taking their cue from steep losses on Wall Street as an overnight rout in oil prices heightened worries about the global economy.

US crude prices were up 0.8% at $30.72 a barrel, but still not far from Tuesday's nadir of $29.93, which was its lowest level since December 2003. Global benchmark Brent settled down 1.8% on Wednesday at $30.31 a barrel, after falling as low as $29.96. That marked its first move below $30 a barrel since April 2004.

MSCI's broadest index of Asia-Pacific shares outside Japan dropped 0.7% in early trade. Japan's Nikkei shed 3.3%, as downbeat domestic data added to the gloom.

Japan's core machinery orders fell 14.4% in November from the previous month, down for the first time in three months and marking a bigger decline than economists' median estimate for a 7.9% drop.

On Wednesday, better-than-expected China trade data lifted Asian sentiment and gave equities and commodities prices a much-needed boost. But those gains unravelled later in the global session, and major US stock indexes finished with sharp losses.

“Despite improved sentiment after the better-than-expected trade balance report in China, risky assets were hit by more evidence of a supply glut in the energy markets that pushed oil prices back to multi-year low levels," strategists at Barclays wrote in a note to clients.

The benchmark 10-year US Treasury yield plumbed its lowest levels since late October as investors sought safety in government debt. It stood at 2.078% in early Asian trade, compared with its US close of 2.066% on Wednesday.

Undermined by lower US yields, the dollar lost ground to the perceived safe-haven Japanese counterpart. It was buying 117.38, down about 0.2%. The euro edged up about 0.1% to $1.0889.

Boston Fed President Eric Rosengren sounded a cautious tone, saying global and US economic growth may be slipping and could force the Fed into a more gradual course of rate hikes than officials currently expect.

Market participants continued to keep an eye on China's yuan. The People's Bank of China has held the line on its currency in the past few days, calming fears of a sustained depreciation.