SYDNEY (Reuters) - Asian stocks retreated from seven-week highs on Thursday as Wall Street buckled under profit-taking pressure, while upbeat U.S. economic news helped the dollar snap a three-day slide.
MSCI's broadest index of Asia-Pacific shares outside Japan eased 0.4 percent, having closed on Wednesday at its highest since early June. Tokyo's Nikkei dipped 0.2 percent, continuing to find resistance ahead of the 15,000 mark.
"Strength in U.S. dollar will reduce foreign investor buying, and this will weigh on emerging market stocks including those of South Korea," said Lee Kyoung-soo, a market analyst at Shinyoung Securities.
The decline in Asian bourses came after the U.S. S&P 500 index shed 0.4 percent, a modest move and yet still the biggest fall in almost a month.
Analysts said Wall Street was taking a breather as investors booked profits in a rally that has swept the index to a string of record highs. They were also waiting on company results and outlooks before deciding on whether to jump back in.
"I expect the Nikkei to remain range-bound as many investors opt to wait for clear confirmation of corporate earnings growth," said Hiroaki Hiwada, a senior strategist at Toyo Securities.
While stocks failed to gain a lift from encouraging U.S. data, the dollar benefited and bounced against a basket of major currencies.
The figures out on Wednesday showed a further recovery in the housing market and an acceleration in factory activity, supporting the Federal Reserve's views that the economy will continue to recover gradually.
Treasury bond yields rose as a result, which in turn provided support for the greenback.
The dollar index edged up 0.1 percent in early Asian trade, having climbed 0.4 percent on Wednesday to be off a one-month low plumbed this week.
Against the yen, the dollar popped back above 100. It also outperformed the euro, which dipped below $1.3200 from a one-month high around $1.3256.
The euro managed to rise versus other currencies though, scaling a two-month peak against the yen around 132.74 after closely watched surveys showed unexpected growth in euro zone factories.
Markit's flash Eurozone Composite PMI, based on surveys of thousands of companies across the euro zone and a reliable indicator of growth, jumped to an 18-month high of 50.4 in July from 48.7 in June.
Data later on Thursday is expected to show Britain's economy expanded at a faster pace in the second quarter, helped by growing confidence among consumers and by signs that companies are ready to borrow and spend more.
The New Zealand dollar made a strong comeback against the greenback after the country's central bank surprised some by sounding slightly hawkish, even as it pledged to leave interest rates unchanged at a record low 2.5 percent until year end.
It was last at $0.7969, having rallied to $0.7986 from a low of $0.7925 after the Reserve Bank of New Zealand's rate statement.
Both U.S. and European data offered cold comfort to commodity investors fretting about a slowdown in China.
Copper eased 0.5 percent to $7,055, erasing Wednesday's 0.2 percent rise. U.S. crude slipped 0.3 percent to $105.10 a barrel, extending its pullback from a 16-month high of $109.32 set last Friday.
Spot gold traded at $1,319 an ounce, following a 2.0 percent slide on Wednesday.
(Additional reporting by Jungyoun Park in Seoul and Tomo Uetake in Tokyo; Editing by Shri Navaratnam)
First Published On : Jul 25, 2013 07:00 IST