Asian shares wither as Iraq crisis dims mood

Wed Jun 25, 2014 2:40am EDT
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By Lisa Twaronite

TOKYO (Reuters) - Asian shares fell on Wednesday, echoing losses on Wall Street as concerns about escalating violence in Iraq eclipsed stronger U.S. economic data.

The gloom was likely to spread to European trading, where financial spreadbetters expected Britain's FTSE 100 to open as much as 0.6 percent lower, Germany's DAX down 0.5 percent, and France's CAC 40 to weaken 0.7 percent.

"The bears look to be firmly in control and leaning heavily on that sell button as we expect to see a fairly large gap lower, given current volatility, on the open for the major European indices," Capital Spreads trader Jonathan Sudaria wrote in a note to clients.

U.S. Secretary of State John Kerry urged leaders of Iraq's autonomous Kurdish region on Tuesday to stand with Baghdad in the face of a Sunni insurgency, as security forces fought the rebels for control of the country's biggest oil refinery.

A senior U.S. intelligence official said that the insurgents were "well positioned" to hold a broad swathe of territory captured in northern and western Iraq unless the Baghdad government can muster a counter-offensive.

MSCI's broadest index of Asia-Pacific shares outside Japan fell about 0.4 percent, while Japan's Nikkei stock average ended 0.7 percent lower.

In volatile U.S. trading on Tuesday, the S&P 500 closed down more than half a percent in its sharpest loss since June 12, after earlier setting a fourth record high in five sessions following upbeat U.S. economic data.

Sales of new homes surged 18.6 percent to a seasonally adjusted annual rate of 504,000 units in May, the highest since May 2008 and the biggest increase since January 1992. Separate data from the Conference Board showed its index of consumer attitudes rose to 85.2 in June from a downwardly revised 82.2 in May.   Continued...

A man is reflected on an electronic stock quotation board outside a brokerage in Tokyo April 14, 2014. REUTERS/Issei Kato