* Asian shares rebound after big losses but gains cut after soft China data
* Concerns over Ukraine, China slowdown and copper rout sap risk appetite
* Gold hits 6-month high; euro, Swiss franc 2 1/2-year high vs dollar
* European shares likely to rise, DAX seen up 0.5 pct
By Hideyuki Sano
TOKYO, March 13 (Reuters) - Asian shares cautiously rebounded from two-week lows on Thursday but gains were pared after disappointing retail sales and factory output data underscored investors’ concerns over slowdown in China.
A standoff in Ukraine and a massive fall in copper prices in recent weeks also spooked investors, although a flat close on Wall Street and some positive data in Australia and Japan helped to cushion the blow.
European shares are expected to recoup some of their heavy losses on Wednesday, with Germany’s DAX seen as rising as much as 0.5 percent and France’s CAC 0.4 percent.
In Asia, MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.5 percent, recouping a half of its losses the previous day, with Australian shares gaining on strong local employment data.
But soft Chinese data dented many markets, with Japan’s Nikkei slipping 0.1 percent, erasing gains made after Japanese machinery orders beat expectations. South Korean shares <.KS11 >also erased most of its gains to end up 0.1 percent.
“What we’re seeing today is a reaction to yesterday’s sharp decline based on price (valuation) merits,” said Hana Daetoo analyst Chang Hee-jong.
“But concerns about China remain the biggest issue for the market, and this will continue to affect markets throughout the first half of this year.”
China’s Jan-Feb industrial output growth came in below forecasts for the combined January/February period, with retail sales also weaker than expected, stoking worries growth could fall as Beijing pushes for economic reforms.
“Jan-Feb figures were disappointing, implying weaker growth momentum in China’s economy. Probably a storm is coming,” said Gao Yuan, analyst at Haitong Securities in Shanghai.
A major victim of concerns over China, copper dropped 0.4 percent to $6,508 a tonne, a day after it hit a four-year low at $6376.25 hit on Wednesday.
After a drop of around 7 percent so far this month, investors are worried about a possible unravelling of Chinese loan deals using copper as collateral, which could cause some investors more pains.
On Wall Street, the S&P 500 reversed early losses and ended nearly flat, outperforming many others thanks in part to a string of positive data on the U.S. economy.
The diplomatic stalemate between Russia and the West over Ukraine has also led investors to buy traditional safe haven assets as the European Union agreed on a framework on Wednesday for its first sanctions on Russia since the Cold War.
Gold hit a six-month high of $1374.85.
U.S. Treasuries have erased all their losses after last week’s strong payrolls data, with the benchmark 10-year yield at 2.73 percent versus its six-week high of 2.82 percent hit on Friday.
In the currency market, the Swiss franc hit a two-and-a-half year high of 0.87322 franc to the dollar, while the Japanese yen, which is under pressure from the Bank of Japan’s easing, also ticked up slightly.
The euro also hit 2 1/2-year high of $1.3949, in a possible sign that the currency is regaining a safe haven status as it recovers from the sovereign debt crisis.
In a symbolic move, the Irish government returns to the market with its first regular debt auction on Thursday since it asked for an international bailout three years ago.
On the other hand, the New Zealand dollar hit a 10-month high of $0.8582 after the country’s central bank raised rates as expected and pointed to further tightening ahead to curb inflationary pressures.
The action put the Reserve bank of New Zealand well ahead of major central banks in developed economies, who are still grappling with the aftermath of the financial crisis, helping the kiwi against a basket of currencies at a post-float high .
The Australian dollar also jumped 0.7 percent to $0.9045 after data showed an outsized increase in payrolls .
U.S. crude futures traded near one-month lows hit on Wednesday after Washington announced a surprise plan for a test release of strategic oil reserves, trading at $98.06 per barrel, near Wednesday’s low of $97.55.
But the European benchmark Brent held relatively firm at $108.14 as it drew support from the unfolding crisis over Ukraine.