* Dollar cuts losses as short-covering emerges
* Asian shares slip as investors take light profits
* Shanghai dollar-denominated B shares plunge more than 8
pct
* Gold pauses after setting new record overnight
By Susan Fenton
HONG KONG, Nov 24 (Reuters) - The dollar recouped some of
its overnight losses on Tuesday, while Asian shares slipped as
investors shrugged off upbeat U.S. home sale data and took
light profits on recent rallies.
Financial bookmakers expected shares in Europe to open
lower while U.S. equity futures <STXEc1> were down 0.2 percent.
The dollar <.DXY> recovered ground as investors in Asia
grew more cautious ahead of a string of U.S. economic data this
week and the start of the Christmas shopping season on Friday
after the U.S. Thanksgiving holiday, which will be a key test
of consumer confidence. []
The dollar <.DXY> gained 0.3 percent against a basket of
major currencies after falling in New York where the market
took comments by a senior U.S. Federal Reserve official on
Sunday as further evidence the central bank would maintain its
very low interest rate policy for some time.
Trading at 75.272, the dollar index was above a 15-month
low at 74.679 reached last week.
Dealers in Tokyo said some investors were closing dollar
short-positions ahead of the Thanksgiving holiday.
Asian shares slid, despite a solid performance on Wall
Street after data showed existing home sales reached their
highest level in two-and-a-half years, as profit taking set in.
The Shanghai market was worst hit with the
dollar-denominated B-share index <> plunging more than 8
percent by mid-afternoon as investors gave up on hopes for
government measures to support the market.
Such speculation, including one that China might merge B
shares with an international board being set up for foreign
firms to list in Shanghai, had sparked a near 20 percent market
rally earlier this month.
The MSCI index of Asia Pacific stocks traded outside Japan
<.MIAPJ0000PUS> fell 0.6 percent but it has already rallied 66
percent this year, leading some investors to question whether
data is strong enough to justify further gains at this stage.
"I think everyone has been waiting for a downturn for so
long and it hasn't come. There's a bit of nervousness out
there, you've got gold at record levels," said Martin Angel, a
dealer at Patersons Securities in Australia, where shares slid
0.7 percent.
Revised third-quarter U.S. GDP data and a U.S. consumer
confidence report later on Tuesday will give more clues on the
strength of the world's largest economy. <ECONUS>
Sales at U.S. retailers on Friday after the holiday could
yield vital clues to the recovery power of American consumers,
whose spending accounts for more than two-thirds of the
economy. They could also signal whether Asian exporters can
expect a rush of late orders before Christmas.
STRIKING DIVERGENCE
The Thomson Reuters index of regional shares <.TRXFLDAXPU>
was virtually unchanged.
Shares in Japan <> fell 1 percent as a firm yen <JPY=>
hit exporters shares and investors worried about the economy.
Japanese stocks show a striking divergence with their Asian
peers. While the MSCI Asia Pacific ex-Japan is only just below
a 14-month high and sitting on gains of nearly 70 percent this
year, the MSCI Japan languishes at a seven-month low and is
negative for the year.
Policy uncertainty is helping depress sentiment. Japanese
Finance Minister Hirohisa Fujii said on Tuesday that demand was
weak and fiscal policy alone could not revive it, putting
pressure on the Bank of Japan to respond to deflation and
fanning a policy dispute between the government and the central
bank. []
"The Bank of Japan is asleep at the wheel as usual,"
banking minister Shizuka Kamei told reporters.
Japan Airlines <9205.T> was one of the biggest losers,
tumbling 8.4 percent, hitting a record low at one point, on
fears the struggling carrier could face bankruptcy.
[]
As the dollar steadied, gold <XAU=> retreated to $1,166 an
ounce as investors booked profits after the precious metal
scaled a record high at $1,173.50 on Monday.
Traders, however, said sentiment remained bullish,
underpinned by expected prolonged weakness in the dollar which
makes bullion cheaper for holders of other currencies and
boosts its appeal as an alternative asset.
Investors were also taking profits on the Australian
dollar <AUD=>, which succumbed to a wave of profit taking from
stellar gains before the year ends. A trader with a U.S. bank
said hedge funds had been among the biggest sellers of the
Aussie in recent days. []
Oil prices <CLc1> were little changed at around $77.60 a
barrel ahead of a weekly inventory report due later from the
American Petroleum Institute.
"The market is basically in a holding pattern, awaiting
more data," said Peter McGuire, managing director of Commodity
Warrants Australia.
(Additional reporting by Victoria Thieberger in MELBOURNE and
Jennifer Tan in SINGAPORE; Editing by Kazunori Takada)
(susan.fenton@thomsonreuters.com; +852 2843 6367; Reuters
Messaging: susan.fenton.thomsonreuters.com@reuters.net)
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