Asian stocks unsettled by Syria jitters; oil rises

 

 Asian stocks slipped on Tuesday, while Brent crude held near a five-month high after the United States signalled possible military action against the Syrian government over a suspected chemical weapons attack.

 

Heightened geopolitical tensions coupled with uncertainty over whether the US Federal Reserve will begin to withdraw stimulus next month were likely to keep investors sidelined, analysts said.

 

MSCI's broadest index of Asia-Pacific shares outside Japan dipped 0.4%, reversing Monday's rise. Tokyo's Nikkei fell 0.7%, while the safe-haven yen edged higher.

 

"There's some possibility of another volatile day if speculators decide to attack the market, as the volume is likely to remain very low," said Mitsushige Akino, chief fund manager at Ichiyoshi Asset Management.

 

"Most investors, I would say 90% of players, would prefer to wait and see today."

 

US Secretary of State John Kerry, in the most forceful reaction yet to last week's gas attack outside Damascus, said President Barack Obama "believes there must be accountability for those who would use the world's most heinous weapons against the world's most vulnerable people.

 

His comments saw US stocks end 0.4% lower in light volumes. The risk of supply disruption lifted Brent crude above $111 a barrel to a five-month high. It last traded up 0.4% at $111.10.

 

Major currencies mostly marked time, although the Mexican peso and Brazilian real came under fresh pressure.

 

Highlighting the turbulent times many emerging markets are enduring, Brazil's finance minister said the Fed has communicated its plans to reduce monetary stimulus "poorly", prompting some of the wild swings in the value of currencies and stocks in emerging market economies.

 

Among the major currencies, the dollar index was a tad softer at 81.326 as the euro firmed 0.1% to $1.3381. Against the yen, the greenback edged 0.3% lower to 98.17.

 

Investors bought gold following data showing a big drop in orders for US durable goods in yet another set of disappointing economic figures.

 

The data has raised some doubts over whether the Fed will next month start to dial down stimulus, which has kept US interest rates near record lows and increased the allure of hard assets.

 

Spot gold traded at $1,403 an ounce, having scaled an 11-week peak of $1,406.01 on Monday. It has now rallied more than $200 since the end of June when prices troughed at three-year lows.