ET:Asian shares, dollar struggle on Ukraine anxiety
TOKYO: Asian stocks stumbled on Friday and the dollar languished against a basket of currencies, as fears of an escalating Ukraine crisis eclipsed upbeat US economic data and robust US tech shares.
Financial spreadbetters predict downbeat openings in the European session, expecting Britain's FTSE 100 to be off 0.2 per cent, and Germany's DAX and France's CAC 40 down 0.3 per cent each.
US Secretary of State John Kerry said on Thursday that time was running out for Moscow to change its course in Ukraine.
President Barack Obama was expected to speak to European leaders on Friday to try to nudge the European Union towards fresh sanctions against Russia, sources familiar with the matter said.
Ukrainian forces killed up to five pro-Russia separatists on Thursday and Russia conducted army drills near the border, raising fears its troops would invade.
"The escalation of tension in Ukraine is likely to keep markets risk-off," said Kyosuke SuzukiBSE -2.81 %, director of forex at Societe Generale in Tokyo.
MSCI's broadest index of Asia-Pacific shares outside Japan erased early modest gains and fell 0.8 per cent, on track for a 1 percent weekly loss but still up nearly 3 per cent for the year.
A gloomy day for Chinese equities darkened the mood further. Hong Kong's Hang Seng Index shed 1.2 percent and touched a four-week low on concerns about the state of China's economy and the health of the banking sector. The Shanghai Composite Index fell 0.8 percent.
"People aren't very keen on any of the Chinese banks at the moment, because the banks reflect the overall concerns about the economy," said Larry Jiang, chief strategist at Guotai Junan International in Hong Kong.
China's yuan hit a 16-month low for the third straight day on Friday on strong corporate dollar demand, shrugging off a stronger fixing by the country's central bank.
Japan's Nikkei stock average wavered in and out of positive territory in extremely choppy trade before ending up 0.2 percent, after opening solidly lower amid disappointment over a failed attempt to reach a US-Japan trade pact. The Nikkei lost 0.6 per cent on the week, and it has tumbled 11.4 per cent so far in 2014.
The two countries made progress in trade talks at a bilateral summit in Tokyo but did not reach the Trans-Pacific Partnership (TPP) trade deal that they were hoping to seal, Economy Minister Akira Amari said on Friday.
