* MSCI Asia ex-Japan tumbles, led by sharp falls in China
* Nikkei bucks trend as sole Asian gainer, hits 53-month
* Dollar index near 6-month highs after solid U.S. data
* Cross-yen, dollar-yen
* European shares likely drop
By Chikako Mogi
TOKYO, March 4 A sell-off in Chinese equities
dragged Asian shares down sharply on Monday, as worries about
Beijing tightening its grip on the property sector compounded
weak sentiment already dampened by a patchy global growth
European markets are seen falling, with financial
spreadbetters predicting London's FTSE 100, Paris's
CAC-40 and Frankfurt's DAX would open down as
much as 0.4 percent. A 0.5 percent fall in U.S. stock futures
pointed to a weak Wall Street start.
The MSCI's broadest index of Asia-Pacific shares outside
Japan tumbled 1.7 percent to a nine-week low.
Shanghai stocks were the worst performer with a 2.9
percent slide and Hong Kong stocks slumped 1.5 percent.
The CSI300 of the top Shanghai and Shenzhen
A-share listings was down 3.8 percent, set for its worst daily
showing since January 2011.
"We are in a high risk zone now. I wouldn't advise clients
to add risk in the near term, since property is a huge sector.
This will have a ripple effect on other sectors in the economy,"
said Hong Hao, chief equity strategist at Bank of Communication
Chinese shares were hit after Beijing on Friday said it
could increase required down payments and loan rates for buyers
of second homes in cities where prices are rising too quickly,
the central government's latest move to contain housing costs
which came ahead of the country's annual parliamentary meetings.
Data also showed growth in China's increasingly important
services sector expanded at its slowest pace in five months in
February, reinforcing the view that the recovery in the world's
second-largest economy remains modest. China's factory growth
also cooled to multi-month lows in February.
"The PMI data were worse than expected and the latest move
on the property sector deepens uncertainty about how funds would
flow within the Chinese economy," said Chiyuki Shiraiwa,
economist at SMBC Nikko Securities in Tokyo.
"I believe the economy remains on a recovery trend and bank
loans were strong in January. But we have yet to see new
projects take place and the effect of the latest regulation
needs to be monitored," she said.
Cross-yen and the dollar-yen were taking their cues from the
sell-off in Chinese equities, lifting the yen broadly.
Resources-reliant Australian shares also shed 1.5
percent after the index hit a 4-1/2-year high last Thursday. The
market has since pulled back on fresh concerns over sluggish
growth in China and budget spending cuts in the United States.
Japan's Nikkei stock average bucked the trend to be
the sole gainer in the region, rising 0.4 percent and scaling a
fresh 53-month high, supported by exporters after data showed
surprisingly strong U.S. manufacturing and consumer sentiment.
South Korea's manufacturing activity expanded in February at
the strongest rate in nine months as new export orders rose by
the sharpest pace since the second half of 2011, a private
survey showed on Monday.
A private gauge of Australian inflation showed price
pressures moderated in February, helped by falls in travel and
clothing costs, indicating there was still scope for cuts in
interest rates if needed to support the economy.
The dollar remained near Friday's six-month high
against a basket of currencies.
It eased against the yen, down 0.2 percent to 93.38,
as markets brushed aside comments from the government's nominee
for next central bank governor, Haruhiko Kuroda, who said the
BOJ must ease monetary policy further both by expanding the size
of asset purchases and targeting a wider type of assets in order
to achieve its 2 percent inflation target.
But Japanese government bonds cheered Kuroda's remarks,
which reinforced market expectations for bolder BOJ policies in
coming months. JGB futures hit a record above 145.26.
Despite the wide-ranging U.S. spending cuts that
automatically kicked in on Friday, the U.S. currency was
bolstered by the robust U.S. economic figures.
Underlying the dollar's strength, data on Friday showed
currency speculators increased their bets in favour of the U.S.
dollar in the latest week.
Evidence of Europe's problems, with Spain also at risk of
needing a state bailout, came on Friday as data showed that
Germany and Ireland were the only two euro zone members with
factory output growth last month. Joblessness in the euro zone
rose to an all-time high.
"The U.S. is not looking particularly good, but in
comparison (to the euro zone) it's looking somewhat better,"
said Rob Ryan, strategist for RBS in Singapore.
The euro steadied around $1.3018, after slipping to a
low of $1.2966 on Friday, its lowest in nearly 3 months.
Just hours after across-the-board spending cuts officially
took effect, President Barack Obama pressed Congress on Saturday
to work with him on a compromise to halt a fiscal crisis that
threatens both the economy and his broader domestic policy
Concerns about the negative economic impact from the U.S.
spending cuts weighed on U.S. crude, which fell 0.2
percent to $90.46 a barrel. Brent was down 0.1 percent
But robust U.S. economic data dented bullion's safe-haven
appeal, capping gains in spot gold which inched up 0.2
percent to $1,577.54 an ounce.