TOKYO (Reuters) – Asian shares fell on Monday after global equities and commodities slumped late last week on weak U.S. growth and rekindled worries in the euro zone, turning investor sentiment cautious ahead of a batch of Chinese data due later in the day.
The MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.2 percent, after ending last week with a gain of 1.7 percent, its biggest such rise in three months.
Resources-reliant Australian shares fell 0.5 percent, hit by a sharp drop in metals prices such as gold and copper as well as oil on Friday.
South Korean shares were down 0.6 percent, weighed by North Korean risk, weak earnings outlooks and the yen’s moves.
North Korea prepared for the annual celebration of its founder’s birth on Monday, having rejected talks with South Korea aimed at reducing tensions and reopening a industrial park shared between the two countries.
The North has threatened for weeks to attack the United States, South Korea and Japan since new U.N. sanctions were imposed in response to its latest nuclear arms test in February.
World equity markets fell on Friday after a poor reading of U.S. consumer sentiment and unexpectedly weak retail sales raised concerns the U.S. economy may be losing momentum and could hurt global growth, which remains vulnerable in the face of a deteriorating European economy, struggling Japanese growth and China’s uncertain recovery.
China will publish major data later in the session, including first-quarter gross domestic product, March retail sales and March industrial output.
“The regional data highlight is China’s Q1 GDP. Perhaps due to ‘smoothing’, the headline reading is usually quite close to consensus, which is 8 percent year-on-year, from 7.9 percent in the fourth quarter,” Westpac said in a note to clients, adding that deviations from forecasts could trigger a knee jerk reaction in Asian currencies.
The Nikkei stock average opened down 1 percent, after briefly hitting its highest level since July 2008 on Friday.
The weak U.S. data pushed the dollar lower on Friday, sending it as low as 98.08 yen, but the dollar rebounded to 98.50 early in Asia on Monday.
The yen’s rise against the dollar also helped send the euro down to a low of 128.70 yen on Friday, but the euro was trading at 129 yen early on Monday.
Gold prices sagged 4 percent to their lowest level since July 2011 on Friday, breaking below $1,500 per ounce, as a draft plan for Cyprus to sell bullion to help pay for its bailout triggered a sell-off.
Gold was at $1,492.60 an ounce early on Monday.
Euro zone finance ministers backed a 10 billion euro bailout for Cyprus on Friday and the European Commission said it would try to help the island’s economy grow again with better use of EU structural funds.
News (NasdaqGS: NWS – news) about cash-strapped Cyprus asking for more help because of its deteriorating economy also boosted demand for safe-haven U.S. Treasuries.
Brent oil hit an eight-month low just above $101 a barrel on Friday as the outlook for global crude demand growth dimmed.
U.S. crude futures were down 0.7 percent to $90.65 per barrel early on Monday.
(Editing by Eric Meijer)
