Asian shares slipped on Monday and the dollar stayed near a four-month low against a basket of major currencies after soft data raised doubts over whether the US economy has been growing despite US share prices standing at historic highs.
MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.6 percent, although Japan’s Nikkei share average edged up just 0.4 percent thanks to some companies’ move to boost shareholder returns, Reuters reported.
Spreadbetters expect European shares to post small gains, with Britain’s FTSE and France’s CAC40 seen rising 0.2 percent, though a lot depends on whether bond markets there will stabilize and also on any developments on cash-strapped Greece.
US industrial production unexpectedly fell for a fifth straight month in April while consumer confidence dropped to a seven-month low in early May, data showed on Friday, pushing down the dollar and US bond yields.
Coming on the heels of weak retail sales and producer inflation data, the reports stoked concerns that the US economy is hardly gaining momentum after disappointing 0.2 percent annualized growth in January-March.
Questions have arisen over whether the economy grew at all in the last quarter. “US GDP will likely be revised down in the next update to show a contraction. We estimate the US economy shrank 0.9 percent,” said Shuji Shirota, head of macro economics strategy group at HSBC in Tokyo.
While many investors stick to the view that the US economy will accelerate later this year, signs of weakness are a source of concerns given many investors counted on US growth to lead the global economy as China slows down and many other major economies are in the doldrums.
“Share prices in Europe, China, and Japan have risen already so far this year, so the market needs confirmation that the economy and corporate earnings will be improving,” said Yoshinori Shigemi, global market strategist at JPMorgan Asset Management.
Wall Street shares also stood near record highs, with the S&P 500 closing at a new peak for a second straight session on Friday at 2,122.73.
