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GLOBAL MARKETS-Asian shares ease, euro near 6-wk lows on Italian woes; gold jumps

Published 2018-10-02, 09:27 p/m
© Reuters.  GLOBAL MARKETS-Asian shares ease, euro near 6-wk lows on Italian woes; gold jumps
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* Asian stock markets : https://tmsnrt.rs/2zpUAr4

* Italy weighs on global stocks; Nikkei off 0.2 pct

* Oil near four-year highs, gold firm

* Trade pact clause seen deterring China deal with Canada, Mexico

By Swati Pandey

SYDNEY, Oct 3 (Reuters) - Asian shares ticked lower on Wednesday and the euro held at six-week lows as Italy's mounting debt and Rome's budget plan set it on a collision course with the European Union.

Japan's Nikkei .N225 eased 0.1 percent on a stronger yen. Australian shares .AXJO were a touch firmer while New Zealand's benchmark index .NZ50 fell 0.3 percent.

Investors remained jittery even as a new U.S.-Mexico-Canada trade agreement appeared to ease global trade tensions. A controversial clause in the trilateral pact put the focus back on the Sino-U.S. tariff dispute.

China's financial markets are closed for the National Day holiday and will resume trade on Oct. 8. The markets in the world's second biggest economy have taken a hammering this year as investors fretted the trade dispute could put a significant dent on growth.

That left MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS a shade weaker at 515.9 points.

Overnight, two of Wall Street's three main indices closed lower with the S&P 500 off a touch and the Nasdaq .IXIC down 0.5 percent. The Dow .DJI gained 0.5 percent to close at a fresh record high. .N

"The big Tuesday problems are the same ones that were lurking behind the surface on Monday, including Italy budget worries," JPMorgan (NYSE:JPM) analysts said in a note.

"Stocks have been whistling past this graveyard for a few days but they are finally starting to pay attention," they added.

Italian 10-year bond yield soared to 4-1/2 year highs on Tuesday after a lawmaker said most of the country's problems would be solved by ditching the euro, but reassuring comments from the government bought calm to a jittery market. selloff in Italian debt was triggered after EU officials expressed concerns about Italy's budget plan, which would widen the deficit significantly. The deficit blowout revived fears of the eurozone debt crisis and put pressure on the euro.

"Budget details are still unavailable but the real anxiety surrounds the medium-term path of spending and debt. There is no evidence to suggest the sell-off has run its course," ANZ analysts said in a note to clients.

The euro EUR=D3 paused at $1.1553 after falling for five days in a row to $1.1506, the lowest since Aug.21.

Sentiment was also hampered as investors turned their focus to the Sino-U.S. trade war.

China's hopes of negotiating a free trade pact with Canada or Mexico were dealt a sharp setback by a provision deep in the new U.S.-Mexico-Canada trade agreement that aims to forbid such deals with "non-market" countries. clause, which has stirred controversy in Canada, fits in with U.S. President Donald Trump's efforts to isolate China economically and prevent Chinese companies from using Canada or Mexico as a "back door" to ship products tariff-free to the United States.

The dollar's index, which measures the greenback against a basket of major currencies .DXY , was last at 95.46, pulling back from six-week highs of 95.744 set on Tuesday.

Gold traded near its highest level in more than a week as investors sought refuge in the safe haven after equity markets weakened. Spot gold XAU= was last at 1,206.04 after adding 1.3 percent to $1,208.23 an ounce overnight. prices held close to four-year highs on supply worries due to Washington's sanctions on Iran. [O

Brent LCOc1 added 8 cents to $84.88 per barrel, not far from a four-year high of $85.45 touched earlier in the week. U.S. crude futures CLc1 inched 1 cent higher to $75.24 a barrel, after earlier touching a four-year high of $75.91. O/R

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Asia stock markets

https://tmsnrt.rs/2zpUAr4 Asia-Pacific valuations

https://tmsnrt.rs/2Dr2BQA

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Editing by Shri Navaratnam)

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