* MSCI Asia ex-Japan up 0.1 pct, Nikkei falls to 4-week low
* Japan GDP shrinks in Q3, India industrial output weakens
* Hedge fund bookclosing seen weighing on commodities
* Euro zone meeting unlikely to decide on Greece bailout
* European shares likely narrowly mixed
By Chikako Mogi
TOKYO, Nov 12 Asian shares were capped on Monday
as investors' concerns about the fiscal crisis in the United
States and Greece's bailout programme dented optimism over the
growth prospects of the world's two largest economies, the
United States and China.
Adding to the uncertainty, Japan reported that its economy
shrank 0.9 percent in July-September from the previous quarter,
the first contraction in three quarters, suggesting faltering
global demand and weak consumer spending may push the world's
third-largest economy into a mild recession.
India's industrial output undershot forecasts in September.
MSCI's broadest index of Asia-Pacific shares outside Japan
was up 0.1 percent after ending last week down
0.7 percent at a one-week low. Energy and
materials underperformed, weighing on
resources-reliant Australian shares which eased 0.3
South Korean shares were off 0.2 percent and India's
BSE index slipped into negative territory while
Southeast Asian stocks were mixed. Hong Kong shares were
up 0.1 percent but Shanghai equities fell 0.2 percent.
Japan's Nikkei stock average fell 0.8 percent to a
"Investors remain consumed by U.S. fiscal cliff
consequences, and this is capping market enthusiasm with such a
significant obstacle remaining in the path of financial
markets," Tim Waterer, senior trader at CMC Markets said.
A 0.1 percent rise in U.S. stock futures suggested a
firm Wall Street open, but European shares will be mixed, with
financial spreadbetters expecting London's FTSE 100,
Paris's CAC-40 and Frankfurt's DAX to open
between up 0.1 percent and down 0.1 percent.
President Barack Obama on Friday invited congressional
leaders to the White House, kicking off negotiations to avoid
the "fiscal cliff" by finding a compromise to cut the U.S.
deficit before nearly $600 billion worth of spending cuts and
tax increases kick in early 2013.
Analysts say the fiscal cliff could derail the U.S. economy,
which has shown signs of a modest recovery.
Markets are also eyeing the debt ceiling, which needs to be
raised to avoid a government shutdown.
Commodities were mixed, with U.S. crude inched up 0.1
percent to $86.12 a barrel while Brent fell 0.2 percent
to $109.23. Gold was up 0.2 percent to $1,734.20 an ounce
and London copper rose 0.1 percent to $7,580 a tonne.
"Commodities in general will be weighed down as November and
December mark the bookclosing season for hedge funds," said
Naohiro Niimura, a partner at research and consulting firm
Market Risk Advisory.
Base metals such as copper face limited upside as improving
Chinese data means less need for further stimulus while the
timing of expected infrastructure spending is unclear, he said.
"Since these public spendings will likely come from bank
loans, sluggish loan data suggests investment may not have
begun," Niimura said.
Data on Monday showed Chinese banks extended 505.2 billion
yuan ($81.5 billion) of new local currency loans in October,
below market expectations of 600 billion yuan.
US, CHINA IMPROVE
The dollar steadied against the yen at 79.48,
hovering near Friday's three-week low of 79.07 yen.
The euro inched up 0.2 percent to $1.2730, off a
two-month low against the dollar of $1.2690 touched on Friday.
The euro inched up after Greece on Sunday won a parliamentary
approval for the 2013 budget law, vital for reviving its stalled
international aid and avoid insolvency.
But euro zone finance ministers were unlikely to release a
new tranche of loans to Greece at their meeting on Monday.
"Worries about Greece still remain, but at least some
uncertainties have been removed, so we are unlikely to see a big
euro selloff," said Masashi Murata, senior currency strategist
at Brown Brothers Harriman in Tokyo.
U.S. September wholesale inventories and sales, as well as
November consumer sentiment rose while China's trade surplus
ballooned to its biggest in 45 months in October, reinforcing
other indicators that have suggested the need for new economic
stimulus measures had become less urgent.
China is also taking steps which may affect global capital
flows. It plans to boost foreign investment in mainland stock
and bond markets by raising quotas for the Renminbi Qualified
Foreign Institutional Investor scheme, which allows approved
investors to channel offshore yuan funds into mainland markets.
It also eyes raising the quotas for the Qualified Foreign
Institutional Investor scheme, the original, dollar-denominated
programme that allows institutional investors to buy stakes in
Chinese-listed stocks or bonds.
For outside investment, the sovereign wealth fund China
Investment Corporation said it will focus more of its
$482 billion firepower on Asia.
Sentiment steadied in Asian credit markets, with the spread
on the iTraxx Asia ex-Japan investment-grade index
barely moved from Friday.