* China GDP, retail sales, industrial output to set tone
* Dollar bulls hear a hawkish hint from Fed's Yellen
* Oil prices lowest since early April as supply worries ease
By Wayne Cole
SYDNEY, July 16 Asian stocks held steady on
Wednesday as markets braced for a data deluge from China, while
a slide in oil prices to the lowest in over three months was
taken as a potential positive for global growth.
Chinese reports on gross domestic product, retail sales and
industrial output are expected to confirm the economy stabilised
in the second quarter after a shaky start to the year.
Estimates are the economy grew 7.4 percent last quarter, but
anything less would likely pressure stocks in the region while
crimping risk appetite globally.
MSCI's broadest index of Asia-Pacific shares outside Japan
was flat while Japan's Nikkei barely
Wall Street had provided scant direction after investors
gave a muddled reaction to testimony from Federal Reserve Chair
Yellen reiterated that the U.S. labour market was far from
healthy and signalled the Fed will keep monetary policy loose
until hiring and wage data show the effects of the financial
crisis are "completely gone."
Yet bond investors fixed on a comment that rates could rise
more quickly should the labour market continue to improve at a
rapid pace, and shoved up short-term Treasury yields.
The latest U.S. economic news was generally upbeat as a
solid rise in core retail sales in June combining with upward
revisions to past months and led analysts to nudge up estimates
for economic growth in the second quarter.
The Dow ended up a bare 0.03 percent, while the S&P
500 lost 0.19 percent and the Nasdaq dropped
High-flying social media and biotechnology shares took a hit
after the Fed singled out the valuation of the sector as
JPMorgan Chase & Co and Goldman Sachs
outperformed after reporting strong results. JPMorgan finished
up 3.5 percent and was the biggest gainer on the Dow.
The contrast to Europe was stark as banking shares were
sideswiped when Portugal's Banco Espirito Santo slumped
17.5 percent to a fresh record low. Traders blamed concerns over
the bank's Angolan loan portfolio and the sale of a stake at a
low price by the bank's founding family on Monday.
Also not helping was the ZEW survey showing German analyst
and investor morale dropped in July for a seventh straight month
to its lowest level since December 2012.
European shares ended down 0.4 percent, while the
euro took collateral damage and fell to $1.3567.
The single currency also took a mauling from the pound which
jumped when UK inflation surprised with a high reading, stoking
speculation that interest rates would rise this year.
The euro sank to a two-year trough at 79.08 pence,
while sterling made a six-year peak on the dollar at $1.7191
. The U.S. currency still managed to gain elsewhere and
its index edged up to a three-week high at 80.409.
An early mover in Asian hours was the New Zealand dollar
which slid to $0.8722 after the country reported
In commodity markets, gold prices fell back to
$1,295.65 an ounce and further away from last week's peak at
Oil prices extended their recent decline as rising Libyan
supplies and downbeat economic data from Europe sharpened
concerns the global market was heading into a near-term glut.
World oil prices have been falling for three weeks now as
traders shift their focus from violence in Iraq and Libya to
weak global fundamentals.
Brent futures lost another 18 cents to $105.84 a
barrel, having shed over a dollar on Tuesday. U.S. crude futures
recouped a little of their losses to be up 22 cents at
$100.18 a barrel.
(Editing by Eric Meijer)