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Asian shares hit by Wall St fall, China PMI in focus

Japan's Nikkei share average fell 0.8 per cent while MSCI's broadest index of Asia-Pacific shares outside Japan dropped 0.27 per cent.

[TOKYO] Asian shares sagged on Thursday after a retreat on Wall Street and falling crude oil prices revived investor concerns over slowing global growth, as markets nervously waited for Chinese and European manufacturing reports later in the day.

Japan's Nikkei share average fell 0.8 per cent while MSCI's broadest index of Asia-Pacific shares outside Japan dropped 0.27 per cent. "I think it will take some time before markets calm down. Market sentiment is still fragile. The market has realised that the US economy cannot be decoupled from sluggishness in the rest of the world," said Tsuyoshi Shimizu, chief strategist at Mizuho Asset Management. "But on the other hand, I think the market is now going to the other extreme in betting on recoupling of the US and the rest of the world," he added.

Wall Street shares slid on Wednesday after big gains in the past few days.

Energy companies were hit by a fall in oil prices while earning results from companies such as Boeing and Biogen Idec failed to meet investors' lofty expectations.

In addition, a shooting incident at the Canadian parliament in Ottawa unnerved investors.

Oil prices flirted near multi-year lows hit last week, as data showed a second consecutive weekly jump in US crude stockpiles.

The US Energy Information Administration said crude stocks rose by 7.11 million barrels, more than double the 2.7 million barrel increase analysts had expected.

US crude futures slipped in Asia, extending its 2.8 per cent fall on Wednesday to trade at US$80.46 per barrel, near two-year low of US$79.78 hit last week.

The fall in oil prices underscored worries over the health of the global economy as a recession threatens Europe and data this week showed Chinese economic growth slowed to its weakest level since 2009.

A string of manufacturing data from China and Europe due later in the day will give investors another chance to gauge the pulse of the world economy.

US Treasuries prices edged down after small dips in the previous US session, as a mild rebound in U.S. consumer prices in September was seen as reducing some bets the Fed might postpone possible plans to raise rates in 2015.

The 10-year US Treasuries yielded 2.218 per cent, having risen as high as 2.250 per cent on Wednesday.

The data also helped to lift the US dollar against other currencies. The euro dipped to US$1.2674, near its lowest level in more than a week, having slipped from US$1.28875 marked on Wednesday last week.

The dollar also ticked up to 107.18 yen, up almost a full yen from Tuesday's low of 106.15.

Elsewhere, the New Zealand dollar tumbled 0.7 per cent to US$0.7871 following data showing consumer price inflation slowed in the third quarter.