HONG KONG (Reuters) - Asian stocks dipped on Monday to snap a six-day winning streak, with investors caught between aggressive steps by central bank to alleviate the sharp global downturn and increasingly grim economic data.
Higher-yielding currencies such as the Australian dollar fell ahead of rate cuts expected this week, while oil prices shed more than a $1 after cartel OPEC delayed a third supply cut to later in the month.
Major central banks from Australia to Europe are seen slashing interest rates deeper this week in a string of policy meetings, marking the latest chapter in official efforts to limit the economic fallout from the 15-month credit crisis.
European shares were seen mixed at the start, with financial bookmakers calling for a more than 1 percent rise in Britain's FTSE 100 but a drop in Germany's DAX.
Stocks around the world recovered last week after the U.S. government rescued banking giant Citigroup, the Federal Reserve said it would buy up to $800 billion debt to help households access credit and China slashed rates.
Portfolio managers are grappling with whether the sell-off across equity markets has adequately anticipated the drop in corporate profits from the sharp economic downturn, or whether a further slide is in the offing.
"The market is still tentative because of potential profit downgrades and bad economic news will probably outweigh for a while," said Hans Kunnen, head of investment market research at Colonial First State Investments in Sydney.
The MSCI index of Asia-Pacific stocks outside Japan inched down 0.3 percent but is up 18 percent from a five-year low hit last month. For the year, the index has plunged 57 percent.
In a positive sign for Asian stocks, investors have started shifting funds into equities. Data from EPFR Global showed Asian ex-Japan stocks posted a second straight week of fund inflows in the week ending last Wednesday.
Japan's Nikkei average, however, fell 1.4 percent as some investors booked profits after markets rose nearly 8 percent last week.
Hong Kong's Hang Seng index was the best performer in the region, rising 1.8 percent. Exporter shares helped lift the market on reports of brisk holiday spending in the United States.
Trading volume was subdued as U.S. investors gradually returned to their desks following the Thanksgiving holiday.
BLEAK DATA
Data on Monday showed South Korean exports plunged 18.3 percent in November from a year earlier, the sharpest fall in seven years.
A gauge of manufacturing activity in China showed the sharpest monthly contraction in its 4-1/2-year history on plunging new orders for export goods.
The yuan slid on market talk Chinese authorities might tweak foreign exchange policy to stimulate the economy, with the central bank's mid-point for the currency set 0.23 percent weaker at 6.8505 per dollar -- the biggest drop since May.
Markets looking ahead to a batch of closely watched figures in the United States this week, with the Institute for Supply Management's factory index expected to show activity shrinking at the fastest pace since the early 1980s.
Improved fund flows into equities may help buoy beleaguered Asian currencies. The South Korean won rose 2 percent to 1,439.9 to the dollar despite the downbeat trade figures.
The yen edged up as investors trimmed higher-yielding currencies. The dollar dipped 0.2 percent to 95.25 yen.
The Australian dollar shed 1.5 percent to $0.6455 before an expected rate cut by the country's central bank, with some traders eyeing a full percentage point slash.
Safe-haven government bonds slipped after gains in most stock indexes.
The 10-year Japanese government bond yield rose 1.5 basis point to 1.395 percent, while the 10-year Treasury yield was steady at 2.925 percent after initially dipping to a 50-year low of 2.890 percent.
