Asia stocks wilt, German coalition impasse hits euro

TOKYO (Reuters) – Asian shares pulled back on Monday with investor sentiment hurt by a retreat on Wall Street, while the euro and German stock futures skidded after German coalition talks hit an impasse.

European stock futures STXEc1 were down 0.3 percent, suggesting downbeat openings for the region, with DAX futures FDXc1 down 0.7 percent, CAC futures FCEc1 off 0.2 percent and FTSE futures FFIc1 0.1 percent lower.

MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was off its session lows to be slightly down, as volatile Chinese shares reversed earlier sharp losses.

Japan’s Nikkei stock average .N225 finished down 0.6 percent.

“It’s year-end season, so people have more incentive to take profits,” said Kyoya Okazawa, Hong Kong-based head of institutional clients, APAC at BNP Paribas Securities.

“This week and next week, more profit-taking is coming, especially whenever some negative news comes out,” he said.

“Long-only clients overseas are looking at the Japanese equity market, because they’ve been a little bit underweight, and there is still some room to add Japanese equities going forward.”

China stocks rebounded from session lows hit after Beijing set sweeping new guidelines to regulate asset management products. Analysts fear that could dampen investor appetite for riskier assets.

The Shanghai Composite index .SSEC was up 0.3 percent, while China’s blue-chip CSI300 Index .CSI300 added 0.6 percent.

Yields briefly rose on Friday, with those on 2-year notes hitting a fresh nine-year peak, after U.S. housing starts surged 13.7 percent to their highest since October 2016.

Spot gold XAU= was down 0.3 percent at $1,290.81 an ounce, after it jumped to a one-month high on Friday as the dollar softened amid tax reform uncertainty. [GOL/]

Crude oil futures were mixed. Brent crude oil LCOc1 dipped 18 cents, or 0.3 percent, to $62.54 a barrel, while U.S. crude CLc1 added 6 cents, or 0.1 percent, to $56.61 a barrel.

Oil rebounded more than 2 percent on Friday after falling for five straight session as a major U.S. crude pipeline was shut and traders anticipated an OPEC deal to extend curbs on production. [O/R]

But crude prices still fell for the first week in six, pressured by rising U.S. output data and doubts that Russia would support an extension of the OPEC output cut deal.