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GLOBAL MARKETS-Asia stocks dip, euro pushes higher before ECB

Published 06/08/2011, 09:27 PM
Updated 06/08/2011, 09:32 PM

By Eric Burroughs

* Asian stocks dip slightly, Nikkei and KOSPI down 0.1%

* Euro edges up, ECB seen laying groundwork for rate hike

* New Zealand c.bank sets stage for higher rates

HONG KONG, June 9 (Reuters) - Asian stocks slipped for a sixth straight day on Thursday as investors cut exposure to risky assets on signs the global economy is losing steam, even as oil prices and the high-yielding Australian dollar pushed higher.

Early losses in stocks were mild following a dip on Wall Street, with Japan's Nikkei average and South Korea's KOSPI both losing 0.1 percent.

The Federal Reserve's beige book summary of economic conditions confirmed that the economy slowed in May due to higher gasoline prices and the supply chain disruptions following Japan's earthquake and tsunami in March.

But the report, prepared for the Fed's next policy meeting later this month, gave few indications of a sharp slowing, with some regions citing ongoing improvement in the job market and even a pick up in economic growth. [ID:nN08248761]

The dollar slipped as other major currencies gained, pushing back towards a one-month low struck earlier in the week. The dollar index , a gauge of its performance against six major currencies, was down 0.2 percent at 73.816.

The euro edged up 0.2 percent to $1.4610 before a European Central Bank policy meeting later in the day at which the ECB is expected to lay the groundwork for a rate hike in July, responding to higher inflation. [ID:nL3E7H83NR]

The Australian dollar rose 0.3 percent to $1.0655 , while Brent crude oil prices inched up 30 cents to $118.15 a barrel.

A slew of data showing the U.S. and other major economies weakened in May have taken a bite out of stocks and other riskier assets, leaving market players scrutinizing upcoming data releases for clues on whether global growth is slowing more than expected.

Later in the day Australian releases its May employment data expected to show a solid 25,000 increase. Earlier in the week Australia's central bank showed little inclination to hike rates further in the near term.

New Zealand's central bank held rates steady on Thursday but also set the stage for higher rates, saying rate hikes were needed as the economy bounces back from the Christchurch earthquake. [ID:nL3E7H709W]

Oil prices extended gains after OPEC failed to reach a deal to increase output, raising fears of supply shortfalls later this year which could push fuel prices higher, weighing further on the economic recovery.

North Sea Brent crude oil futures rose 27 cents to $118.12 a barrel after jumping more than a dollar on Wednesday.

* For Reuters Global Investing Blog, click on

http://blogs.reuters.com/globalinvesting

* For the MacroScope Blog, click on

http://blogs.reuters.com/macroscope

* For Hedge Fund Blog, click on

http://blogs.reuters.com/hedgehub (Editing by Kim Coghill)

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