* Major stock markets drift lower, mirroring Wall Street
* Currencies hug tight ranges, Fed uncertainty cited
* German Ifo sentiment index headlines in light data diary
By Wayne Cole
SYDNEY, Sept 24 Asian share markets were mostly
under water on Tuesday while currencies dithered in tight ranges
as a dearth of major economic news left investors to fret on the
outlook for monetary policy in the United States and Europe.
Taking its cue from a softer Wall Street, MSCI's broadest
index of Asia-Pacific shares outside Japan eased
0.6 percent. Shanghai shed 0.8 percent, and Seoul
Returning from holiday, Tokyo's Nikkei slipped 0.1
percent. One bright spot was stocks in iPhone suppliers,
burnished by news Apple Inc had sold 9 million new
iPhones during their first three days in stores.
European shares were seen falling for a third straight day.
Financial spreadbetters expect Britain's FTSE 100 to
open down 0.15 percent, Germany's DAX down 0.16
percent, and France's CAC 40 down 0.1 percent.
U.S. stock futures also pointed to further weakness
on Wall Street later in the day.
Lacking an obvious culprit, dealers tended to blame
uncertainty about when the Federal Reserve will start trimming
its asset buying following last week's shock decision to
maintain the programme at $85 billion a month.
"I do think that there was a sense of complacency before,
about the Fed being able to drive the market higher simply
through doing whatever it was doing," said Damien Boey, equity
strategist at Credit Suisse.
"But, now there's been a reflection on that and the market's
come off and I think that will continue."
Moves were modest in currencies. The euro idled at $1.3493
, having slipped 0.2 percent on Monday. Both the euro and
the dollar lost ground to the yen, which firmed to 98.76 per
The net result was to leave the dollar little changed
against a basket of currencies at 80.469, and still
uncomfortably close to a seven-month trough hit last week.
Sovereign bonds were generally bid amid the mild risk-off
tone. Yields on 10-year Treasury debt eased another basis point
to 2.69 percent, leaving them 16 basis points lower
since last week's Fed meeting.
Economic data had been too mixed to offer much direction.
Markit's preliminary U.S. Manufacturing Purchasing Managers
Index (PMI) unexpectedly retreated to 52.8 this month from 53.1
That contrasted with Markit's Eurozone PMI which jumped to
52.1 in September, from last month's 51.5, its highest since
June 2011. It also followed a firmer-than-expected survey on
China's manufacturing sector.
Another reading on German business sentiment from the Ifo
Institute is due later and expected to show an improvement to
108.2 in September.
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In truth, dealers conceded there was not much rhyme or
reason behind the latest market moves.
The euro apparently dropped because European Central Bank
President Mario Draghi said euro zone interest rates will remain
at current or lower levels for an extended period. Yet, he has
been saying the same thing for weeks with little obvious impact
on the currency.
Wall Street's wobble was attributed in part on a comment by
New York Fed President William Dudley that the timeline for
tapering was still in place.
But Treasuries rallied because Dudley also said he wanted to
see a broader improvement in the labour market before signing
off on tapering, emphasising the need for policy to "forcefully"
push back against economic headwinds.
Dudley is a close ally of Fed Chairman Ben Bernanke and is
assumed to speak for the dovish majority of voters on the Open
Market Committee, which gives his words weight with investors.
One of the headwinds cited was U.S. fiscal policy amid a
political showdown in Washington that could see the government
shut down, or at the very extreme, default on its debt.
The wrangling looks set to roll on for some weeks, providing
a distraction to policy makers and investors alike.
In commodities markets, gold steadied at $1,327.50 an ounce
after failing to sustain its Fed-inspired rally to $1,374
last week. The story was much the same in copper futures
which held at $7,227.51, from last week's peak of $7,368.00.
Brent crude oil was down a single cent at $108.15 a
barrel, while U.S. crude eased 3 cents to $103.56.