SINGAPORE: Asian stock markets took a breather on Friday from their recent surge as investors took profits, while the dollar inched up after Thursday's slide and optimism over possible renewed supply cuts by OPEC lifted oil prices.
MSCI's broadest index of Asia-Pacific shares outside Japan pulled back 0.2 percent, on track to end the week up 1.2 percent, its fourth straight week of gains.
Until Thursday, the index surpassed its previous intraday high for seven consecutive sessions, and closed at 19-month highs in the past two.
A batch of positive economic data out of Asia this week, driven by improving exports and rising commodity prices, has bolstered shares, although concerns linger that any protectionist threats posed by U.S. President Donald Trump could reverse the recovery.
Singapore revised its fourth-quarter gross domestic product growth sharply higher; Taiwan raised its 2017 economic growth target to a three-year high; Indonesian exports rose at the fastest pace in more than five years in January; Chinese inflation picked up by more than expected in January to near six-year highs; and Malaysia reported a widening in its current account surplus on Thursday
Japan's Nikkei slid 0.7 percent, set to close 0.9 percent lower for the week. Australian shares were down 0.2 percent, shrinking the week's gains to 1.4 percent.
Overnight, Wall Street put in a mixed performance, with the Dow Jones Industrial Average <.DJI> barely eking out its sixth straight record high, while the S&P 500 <.SPX> and Nasdaq <.IXIC> snapped a seven-day winning streak as investors paused their buying to digest recent gains.
"A soft lead from U.S. markets and slightly weaker base metals prices suggest that the local market will take a wait-and-see attitude in early trade this morning," Ric Spooner, chief market analyst at CMC Markets, wrote in a note.
The dollar edged up after posting its biggest one-day drop in more than two weeks on Thursday as uncertainty about the timing of the next Federal Reserve rate hike offset the impact of stronger economic data.
Manufacturing activity in the U.S. Mid-Atlantic region surged to its highest in 33 years, housing data indicated a recovery in the sector was on track, and weekly jobless claims pointed to a labor market that continues to tighten.
But traders concluded that Fed Chair Janet Yellen's economic testimony before Congress on Wednesday didn't offer enough conviction that the central bank would raise rates at its next meeting in March.
The dollar index <.DXY>, which tracks the greenback against a basket of trade-weighted peers, added 0.1 percent to 100.57, on track to end the week 0.2 percent lower. It tumbled 0.7 percent on Thursday.
The dollar gained almost 0.2 percent early on Friday to 113.39 yen <JPY=>, up by the same percentage for the week. It lost about 0.8 percent on Thursday.
The dollar's recovery pulled the euro lower, with the common currency edging back slightly to $1.06675 on Friday, after Thursday's 0.7 percent gain, set to end the week 0.2 percent higher.
The stronger dollar also weighed on gold <XAU=>, which slipped 0.1 percent to $1,237.50 an ounce. But the precious metal remains poised for a 0.3 percent rise for the week.
Oil prices built on Thursday's gains on positive sentiment over reports that the Organization of Petroleum Exporting Countries may consider extending its oil supply-reduction pact with non-members and may even apply deeper cuts if inventories don't fall to a targeted level.
For now, that optimism appears to be winning the tug of war with concerns over a rise in U.S. production, but that worry is set to leave oil prices with a weekly loss.
U.S. crude added 0.1 percent to $53.43 a barrel in early Asian trade, but is headed for a decline of 0.8 percent for the week.- Reuters