* MSCI Asia ex-Japan off 0.5 pct, Nikkei down from 7-mth
* Investors focus on U.S. "fiscal cliff" risks
* Commodities ease on worry over U.S. growth, budget talks
* Euro off highs, dollar falls vs yen
* European shares likely slip
By Chikako Mogi
TOKYO, Nov 28 Asian shares ended a seven-day
winning streak on Wednesday and commodities eased as investors
fretted that a lack of progress in talks on U.S. budget woes
risked putting the world's largest economy into recession,
dragging down global growth with it.
European shares will likely track Asian peers lower.
Financial spreadbetters predicted London's FTSE 100,
Paris's CAC-40 and Frankfurt's DAX will open
down as much as 0.5 percent. A 0.1 percent drop in U.S. stock
futures also hinted at a soft Wall Street open.
MSCI's broadest index of Asia-Pacific shares outside Japan
fell 0.5 percent, retreating from Tuesday's
nearly three-week highs, with materials and energy sectors
leading the declines.
"The global economy, China, Europe, needs the U.S. economy
to grow, and that is why the pressure to get this deal done is
greater than before," said Carl Larry, a derivatives broker at
the Houston-based Atlas Commodities. "The global economy can't
afford for America to slip back into a recession."
Shares in resource-reliant Australian eased 0.2
percent, off Tuesday's two-week highs as top miners fell on
weaker gold prices.
Australia's Bureau of Resources and Energy Economics said
committed investment in major resources and energy projects,
the main driver of Australian growth, still rose to A$268.4
billion ($280.5 billion) at Oct. 31 from A$260.8 billion at
end-April, but the rise partly reflected higher project costs
and masked a fall in the number of projects. A fall in commodity
prices due to a drop-off in Chinese demand also weighed on
"Markets don't really provide any sort of compelling
investment value here at present because the grey cloud of
uncertainty still overhangs the economic climate, in particular
across Europe and the U.S., but also filtering into this part of
the world as well," Jamie Spiteri, senior dealer at Shaw
Stockbroking, said of Australian shares.
U.S. stocks slid overnight after Senate Majority Leader
Harry Reid expressed disappointment over little progress in
dealing with the approaching "fiscal cliff" of deep cuts in
government spending and big tax hikes early next year.
The Shanghai Composite Index slid 0.9 percent to its
lowest in nearly four years as growth-sensitive sectors sank,
extending losses after closing on Tuesday below 2,000 points for
the first time since January 2009.
The weak Chinese stock market, along with doubts over the
U.S. ability to resolve its fiscal crisis, strengthened demand
for sovereign debt, helping to push the 10-year Japanese
government bond futures price to a 9-1/2-year high of
144.79, while U.S. Treasuries clung to gains made on Tuesday.
Japan's Nikkei stock average slumped 1 percent,
after closing on Tuesday at a seven-month high.
The Nikkei had risen 8.8 percent over the past two weeks
since the government announced a Dec. 16 election. Japan's main
opposition party is forecast to win power, and investors expect
it will force the Bank of Japan into aggressive easing.
EUROPE LACKS CONFIDENCE
Tuesday's agreement by international lenders to cut Greece's
debt offered relief that it has averted an imminent bankruptcy,
but uncertainty remained over the lack of details on how Athens
will carry out budget reforms to meet its new debt targets as
analysts cited the deal as falling short of addressing
medium-term financing and debt sustainability issues.
"The uncertainty brought by this approach makes European
assets, including the EUR, vulnerable to global growth risks.
For that reason, we think the European muddle through amplifies
the market's response to the fiscal cliff discussion in the US,"
Barclays Capital analysts said in a note.
The euro fell 0.2 percent to $1.2924, after peaking
at $1.3010 on the Greece news on Tuesday, its highest level
since Oct. 31.
Worries over the fiscal crisis overshadowed positive U.S.
economic data that showed improvement in durable orders, the
real estate sector and consumer confidence, which hit a
4-1/2-year high in November.
The dollar dropped 0.3 percent against the yen to 81.85
. U.S. crude futures were steady around $87.16 a
barrel while Brent edged up 0.2 percent to $110.13.
London copper dropped 0.4 percent to $7,776 a tonne.
Spot gold inched down 0.1 percent to $1,739.40 an
ounce after slipping on Tuesday for a second session.
Southeast Asia kept some hopes that the damage to their
economies may be contained from global growth deterioration
triggered by the prolonged euro zone debt crisis.
Indonesia, Southeast Asia's biggest economy, sees annual
economic growth in the fourth quarter at 5.9-6.3 percent, while
the Philippine economy picked up more than expected in the third
quarter, with the government expecting the economy to surpass
its 2012 full-year growth target of 5-6 percent.
Investors were sidelined in Asian credit markets, keeping
the spreads on the iTraxx Asia ex-Japan investment-grade index
little changed from Tuesday's levels.