* Spreadbetters predict mixed opening for European shares
* Solid China manufacturing activity reports limit Asian share losses
* Dollar index hits two-week peak after U.S. data suggests economy resilient
* Euro remains under pressure after biggest fall vs dollar in 6 months
By Lisa Twaronite
TOKYO, Nov 1 (Reuters) - Asian shares struggled on Friday, as surveys showing improvement in Chinese manufacturing activity were eclipsed by anxiety over when the U.S. Federal Reserve will start to taper its massive stimulus.
That uncertainty, heightened by upbeat U.S. data overnight, pushed the dollar to a two-week high and contributed to largely cautious trading in riskier assets.
Europe looks set for a subdued start. Financial spreadbetters predicted mixed performances, with Britain’s FTSE 100 seen opening much as 0.1 percent higher; Germany’s DAX and France’s CAC 40 are predicted to drop as much as 0.2 percent.
Reassuring signals on China’s factory activity offered some support to Asian shares.
China’s manufacturing sector grew at the fastest pace in 18 months in October, with the official Purchasing Managers’ Index (PMI) rising to 51.4 last month from September’s 51.1, beating economists’ consensus forecast of 51.2.
A separate private report, the final HSBC/Markit PMI, came in at 50.9, up from 50.2 in September and unchanged from a preliminary flash estimate released last week.
MSCI’s broadest index of Asia-Pacific shares outside Japan was slightly lower in late trade, while Japan’s Nikkei stock average ended down 0.9 percent at a one-week closing low.
U.S. S&P E-mini futures edged up about 0.1 percent, after the S&P 500 Index closed down about 0.4 percent but still gained 4.5 percent for the month.
Later on Friday, the U.S. ISM survey of manufacturing for October could offer investors a fresh signal on the Fed’s future course.
“If the ISM report is better than expected, it could add to revived tapering expectations, and U.S. yields and the dollar could go up and stocks could go down,” said Masashi Murata, senior currency strategist at Brown Brothers Harriman in Tokyo.
Data on Thursday showed the pace of business activity in the U.S. Midwest jumped more than expected in October, while jobless claims decline in the latest week, soothing some worries about sluggish fourth-quarter growth after last month’s federal government shutdown.
Still, not all investors or economists were convinced that the latest U.S. data heralded a shift in monetary policy expectations.
“The existence of noise in the October data will likely make it difficult for the Fed to gather enough evidence to start tapering in December,” strategists at Barclays wrote in a note to clients, adding that they still to expect the central bank to begin reducing its current $85 billion monthly bond purchases in March 2014.
The U.S. data pressured emerging market currencies, with the Indian rupee and Indonesian rupiah leading slides.
The euro remained under pressure after plunging in the previous session as euro-zone inflation dropped to its lowest rate in nearly four years, sharpening expectations that the European Central Bank, in contrast to the Fed, will further ease its monetary policy.
The single currency dropped about 0.2 percent to $1.3555, moving away from a two-year peak of $1.3833 set one week ago. On Thursday, it suffered its biggest one-day fall against the greenback in six months, tumbling 1.1 percent.
Data on Thursday showed euro-area inflation slowed to a four-year low of 0.7 percent last month, far below the ECB’s target of just under 2 percent. Other data showed unemployment held at record highs in September.
The dollar index, which measures the greenback against six major currencies, was on track for a sixth session of gains, rising about 0.1 percent to 80.305 after touching a two-week peak of 80.418 and pulling further away from a nine-month trough of 78.998 hit one week ago.
Against the Japanese currency, the dollar was about 0.4 percent lower on the day at 97.91 yen.
In commodities trading, gold steadied but was still trading close to its lowest in nearly two weeks, hurt by sharp losses in the previous session from month-end profit-taking, the strong U.S. economic data and the higher dollar.
Spot gold edged up 0.2 percent to $1,326.01 an ounce, after sliding 1.4 percent on Thursday.
Copper got a lift from the China data, rising 0.4 percent to $7,281 a tonne, moving back toward a one-week peak of $7,300 hit on Thursday.
Brent crude for December added 0.4 percent to $109.26 a barrel, while U.S. crude also edged up 0.2 percent to $96.60.