By Wayne Cole
SYDNEY (Reuters) - All the air was sucked out of Asian shares on Wednesday as oil prices took a fresh spill on news Kuwaiti oil workers ended a three-day strike, leaving markets suddenly directionless.
The deflating mood was reflected in a 0.3 percent drop in EMINI futures for the S&P500 and broad demand for safe-haven U.S. Treasuries.
Oil prices again led the way by reversing much of Tuesday's sharp gains. Brent crude shed 83 cents to $43.20 a barrel, while U.S. crude oil sank $1.02 to $40.11.
"In the near term we are going to see more downward pressure than upward," said IHS analyst Victor Shum.
The retreat dulled risk appetites and dragged MSCI's broadest index of Asia-Pacific shares outside Japan down 0.5 percent. It had started at its highest since early November.
Chinese markets were no help as stocks in Shanghai slipped 2.5 percent, with every sector from financial to telecoms in the red.
Japan's Nikkei clung to a 0.3 percent gain thanks to the recent pullback in the yen but was running into profit taking above the 17,000 barrier.
On Wall Street the Dow ended Tuesday with gains of 0.27 percent, while the S&P 500 rose 0.31 percent to close above 2100 for the first time in 2016.
The Nasdaq eased 0.4 percent, while Intel shed 3 percent after hours as its results disappointed. The chipmaker lowered its revenue forecast and said on Tuesday it would cut 12,000 jobs globally.
Copper, iron ore, gold and silver still held gains, with gold reaching $1,252.30 an ounce. That helped lift commodity currencies, and the Australian dollar briefly notched a high not seen since June at $0.7827.
The U.S. dollar steadied on the yen at 108.93, but remained near recent lows against a basket of currencies.
The euro firmed to $1.1369, from a low of $1.1234 set last week. Traders said much now depends on the outcome of the European Central Bank (ECB) policy meeting on Thursday.
In March, ECB chief Mario Draghi unleashed an aggressive package but muted its impact by suggesting there would be no further cuts, giving the euro an unwelcome boost.
"Outside of some verbal discomfort at the euro's strength and reiteration that the ECB stands ready to take further action if necessary, it is difficult to see what he can do," analysts at ANZ wrote in a note to clients.
"The risks of a further squeeze higher in EUR/USD are significant," they added.
(Reporting by Wayne Cole; Editing by Eric Meijer)
