Asian shares retreat, oil near three-month high on Iraq concerns

Wed Jun 11, 2014 8:52pm EDT
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By Hideyuki Sano

TOKYO (Reuters) - Asian shares slipped on Thursday after Wall Street shares stepped back from record levels while civil war in Iraq supported oil prices.

Japan's Nikkei share average .N225 led the retreat, falling 0.9 percent while MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS dipped 0.15 percent.

The S&P 500 .SPX lost 0.35 percent to 1,943.89, its first significant loss in about three weeks. As recently as Monday it hit a record closing high of 1,951.27.

Some market players blamed a lower global growth forecast from the World Bank being used as grounds to sell while others said fighting in Iraq may have sapped investor appetite.

Adding to the sour tone, the defeat in a primary election of House Majority Leader Eric Cantor, a Republican, further dampened expectations of Washington passing any significant legislation before the November elections.

"I think it was just natural profit-taking after the strong rally we have seen so far. I continue to expect the world's shares to remain solid," said Kensaburo Suwa, senior strategist at Okasan Securities.

Oil prices also stayed near recent peaks as fighting in Iraq prompted worries about the supply outlook.

Militants from an al-Qaeda splinter group who seized the second-biggest city of Mosul earlier this week rapidly advanced into the oil refinery town of Baiji.   Continued...

An employee of the Tokyo Stock Exchange (TSE) looks at a monitor at the bourse at the TSE in Tokyo March 3, 2014. REUTERS/Issei Kato