Asian shares edge up on U.S. data, oil slides

By Lisa Twaronite

TOKYO (Reuters) - Asian shares got a lift on Friday after upbeat U.S. spending data suggested weaker oil prices have some upside for the American economy, though a continued slide in crude prices kept gains in check and heralded a gloomy opening for Europe markets.

Financial spreadbetters expected Britain's FTSE 100 (FTSE) to open down by 65-72 points, or 1.0-1.1 percent lower. Germany's DAX (GDAXI) was expected to open down by 90-101 points, or 0.9-1.0 percent lower, while France's CAC 40 (FCHI) was seen falling by 43-47 points, or down by 1.0-1.1 percent.

"Despite overnight gains in the U.S. and Asia, we are expecting over 1 percent drops for the major indices on the open," as weaker commodities batter energy and mining stocks, Capital Spreads dealer Jonathan Sudaria said in a note.

A spate of China data added up to more concerns for investors, with factory growth slowing more than expected last month to its second-worst reading since the global crisis and investment expansion hovering near a 13-year low.

U.S. crude futures continued to drop after falling below the key psychological support level of $60 a barrel for the first time in five years, and stood at $59.36 in Asia, down about 1 percent on the day.

Brent crude continued its march downwards on Friday and dropped to a 5-1/2-year low of $63 a barrel, bringing this week's losses to more than 8 percent. It was last down 0.4 percent on the day at $63.44.

MSCI's broadest index of Asia-Pacific shares outside Japan (MIAPJ0000PUS) edged up about 0.1 percent, though on track for a loss of over 2 percent for the week.

Japan's Nikkei stock average (N225) ended up 0.7 percent, extending gains as the U.S. data lifted exporter shares, but booked a loss of 3.1 percent for the week.

"Increasing consumption in the U.S. is a big boost for Japanese exporters," said Masayuki Otani, chief market analyst at Securities Japan, Inc.

Global crude prices have plunged in recent weeks on massive oversupply, raising fears that deflation could hit economies around the world. But data on Thursday showed that cheaper gasoline prices apparently helped U.S. consumer spending rise broadly last month, and jobless claims also fell.

One potential risk to the U.S. economy was reduced, at least temporarily, as the Senate approved a two-day extension of government funding late on Thursday to stave off shutdowns of federal agencies that otherwise would have begun at midnight.

Wall Street ended higher on Thursday, but Asian investors have mostly focused on the downside of lower energy costs, which dragged down equities in the region this week.

"The relentless decline in oil prices continues to unsettle risky asset markets. Oil prices have fallen to levels last reached in mid-2009, as OPEC cut its demand forecast to a 12-year low despite lower prices, and U.S. crude inventories rose," Barclays strategists said in a note.

The U.S. data helped the dollar wrest itself off a two-week low of 117.44 yen on Thursday. It was last up 0.2 percent on the day at 118.87 yen <USD/JPY>.

The euro slipped about 0.1 percent to $1.2396 <EUR/USD>, after top-rated euro zone bond yields inched lower in the previous session following a tepid response by banks to the European Central Bank's second round of long-term loans.

Spot gold slipped about 0.4 percent to $1,221.80 an ounce, though it was still on track for a gain of over 2 percent for a week in which it reached a seven-week high, on Wednesday.

(Additional reporting by Thomas Wilson in Tokyo; Editing by Eric Meijer and Richard Borsuk)