Asia stocks weak, dollar shines as rate view unchanged; China eyed

By Saikat Chatterjee

HONG KONG (Reuters) - Asian stocks held near three-week lows and the greenback consolidated recent gains on Thursday after minutes of the last U.S. Federal Reserve policy meeting indicated a December rate increase was still on the cards.

Risk appetite waned, with MSCI's broadest index of Asia-Pacific shares outside Japan <.MIAPJ0000PUS> easing 0.2 percent, its lowest since Sept. 21. Early stock markets were mixed with Australia <.AXJO> down 0.5 percent while New Zealand stocks <.NZ50> up 0.4 percent.

"In our view, if you came into these minutes with a December hike pencilled in, there is no reason to change your stance," Omair Sharif, an economist at Societe Generale, wrote in a note.

 

Wall Street struggled to find fresh momentum after breaking conclusively below a 100-day moving average this week.

The Dow Jones industrial average <.DJI> closed up 0.09 percent, to 18,144.2. The S&P 500 <.SPX> gained 0.11 percent, to 2,139.17 and the Nasdaq Composite .IXIC slipped 0.15 percent, to 5,239.02 with corporate earnings firmly in focus. Volumes were light. [.N]

Chinese stocks and the Australian dollar > will be firmly in focus with trade data due shortly. Economists will be watching the trade breakdowns carefully to see whether the yuan's recent weakness has had a beneficial impact.

The CBOE Volatility Index <.VIX>, the "fear gauge" of near-term investor anxiety held below 16, indicating broader market uncertainty.

Elsewhere, sterling > treaded water after British Prime Minister Theresa May's offer to give UK lawmakers a say in plans to leave the European Union and the U.S. dollar <=USD> basked in the glow of a likely widening interest rate differential in its favour relative to other currencies.

Within Asia, the Thai baht > will be in focus after falling to a eight-month low in the previous session on concerns about the health of 88-year-old King Bhumibol Adulyadej.

Oil prices struggled after falling 1 percent overnight after the Organization of Petroleum Exporting Countries reported its output hit an eight-year high in September, offsetting optimism over the group's pledge to restrict output.

U.S. West Texas Intermediate crude slipped 0.62 percent to trade at $49.87 a barrel. Gold stabilised around the $1,250 per ounce level after falling sharply last week.

(Editing by Eric Meijer)