Asia stocks hang onto weekly gains as yields, oil fall
By Wayne Cole
SYDNEY (Reuters) — Asian shares took a breather on Friday as a batch of softer U.S. economic data took some of the steam out of Wall Street, but also boosted bonds in a big way while slugging oil prices in a boon for the inflation outlook.
MSCI's broadest index of Asia-Pacific shares outside Japan eased 0.4% from a two-month high, but still up 3.1% so far for the week in its best performance since July.
Both Brent and U.S. crude slid almost 5% on Thursday to four-month lows in a move that was blamed on economic and supply concerns, though technical selling likely played a part when the $80 bulwark broke. [O/R]
Dealers suspected algorithmic and trend-following funds drove the speculative sell off with much of the losses coming in just a single hour of trade.
Brent was last down 10 cents at $77.36 a barrel, and a world away from the $97.69 top hit in late September, while U.S. crude eased 7 cents to $72.83.
Whatever the cause, the rout should put added downward pressure on consumer prices across the globe and reinforce expectations of policy easing next year.
Adding to the disinflationary theme was commentary from Walmart (NYSE:WMT) executives that costs were «more in check» and they were planning on cutting prices for the holiday season.
Equity investors were not as impressed with the idea of margin compression and knocked Walmart shares down 8%, while a drop in energy stocks dragged on the S&P 500.
Early Friday, S&P 500 futures were all but flat, as were Nasdaq futures. EUROSTOXX 50 futures gained 0.3% and FTSE futures 0.2%.
Japan's Nikkei added 0.2%, to be 2.8% firmer for the week, helped by reassurance from the Bank of Japan that it was sticking with its super loose policy.
Chinese blue chips were a
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