* Asian shares down 1.3 pct, hold up after U.S. slide
* Strong Australia GDP boosts Aussie, Nov rate hike eyed
* JGB 5-yr yield hits 4-yr low as govt bonds extend gains
By Eric Burroughs
HONG KONG, Sept 2 (Reuters) - Asian shares pulled back on
Wednesday after a sell-off on Wall Street prompted a round of
profit-taking, even as upbeat Australian economic growth
figures reassured on the health of recovery.
Japan's Nikkei average <> led losses with a drop of
2.6 percent after a slide in financial shares hit U.S. indexes,
while the drop in oil prices the previous day took a toll on
resource related shares such as oil-and-gas field developer
Inpex <1605.T>.
Some of Tuesday's sharp moves partially reversed as markets
settled down.
U.S. crude oil prices <CLc1> rose 57 cents a barrel to
$68.62 having slid nearly 3 percent the previous day. The
Australian dollar climbed 0.5 percent to $0.8300 <AUD=D4>,
bouncing back from its biggest one-day drop since June.
The Aussie got a boost after data showed Australian
second-quarter GDP rose a surprisingly strong 0.6 percent from
the previous quarter, reviving expectations for the country's
central bank to start raising policy rates from the current 3
percent as soon as November. []
Manufacturing surveys from around the world on Tuesday
provided more evidence that the global recovery accelerated in
August. JPMorgan's global gauge of factory activity showed
growth returning for the first time in 15 months.
[]
The Reserve Bank of Australia is poised to be the first
among major central banks to start raising rates and
normalising the extremely loose policies around the world that
were aimed at reviving the global economy from the worst
recession in decades.
"That supports the Reserve Bank's case for an eventual rise
in interest rates. We think maybe they'll go in November, but
they don't want to move too fast and endanger the recovery,"
said Brian Redican, senior economist at Macquarie in Sydney.
The Australian dollar took a hit the previous day after the
RBA declined to adopt an outright bias towards a tighter policy
at a regular meeting, even as the central bank highlighted the
economy's strength.
The MSCI index of Asia-Pacific shares outside Japan
<.MIAPJ0000PUS> fell 1.3 percent, holding up better compared
with a 2.2 percent drop in the U.S. S&P 500 <.SPX> on Tuesday.
Material and financial shares were the biggest drag on the
MSCI benchmark for Asia.
Helping limit losses was a 1.6 percent jump in the Shanghai
Composite index <>, helped by gains in Sinopec and
PetroChina after China hiked fuel prices to a near-record high.
PetroChina <601857.SS>, the Shanghai Composite's most
heavily weighted stock, gained 1.56 percent but its Hong
Kong-listed shares <0857.HK> dipped 1.3 percent.
The Shanghai index was up for a second day running and
seemed to regain its composure after a nearly 7 percent
sell-off on Monday.
Worries about banks clamping down on lending after a
splurge earlier in the year to pay for government stimulus have
spooked the market. But analysts have warned investors not to
read too much into the opaque and volatile market mostly closed
to foreigners.
In currencies, the dollar was little changed after jumping
the previous day as the Aussie and euro fell back on the slide
in riskier assets.
The dollar index, a gauge of its performance against six
major currencies, was flat at 78.744 <.DXY>.
But against the yen, the dollar dipped as far as 92.51 yen
<JPY=>, a seven-week low, as the Japanese currency posted broad
gains from renewed worries about holding risky positions in
higher-yielding currencies.
Government bond markets extended their winning streak, one
of the signals that has worried some investors by suggesting
the stock market rebound may be overdone.
The yield on five-year Japanese government bonds
<JP5YTN=JBTC> fell a basis point to 0.590 percent, a four-year
low and underscoring how ultra-low interest rates are expected
to persist for a while in the Bank of Japan's battle against
deflation.
