Asia shares rose from a six-week low Wednesday, led by consumer stocks, but disappointing U.S. data have made some investors reluctant to follow commodity prices higher, containing a bounce in risky assets from currencies to oil.
Japan's benchmark Nikkei average <.N225> was up 1.1 percent and MSCI's index of Asia Pacific shares outside Japan rose 0.8 percent. Korea stocks <.KS11> rose 1.59 percent, lifted by automakers and shipbuilders.
European shares were expected to rise Wednesday, taking Asia's lead and bouncing from four-week lows. Britain's FTSE 100 <.FTSE>, Germany's DAX <.GDAXI> and France's CAC 40 <.FCHI> were seen putting on between 0.7 and 0.9 percent, according to financial spreadbetters.
The main Wall Street <.N> indices ended flat to 0.6 percent lower Tuesday after falling as much as 1 percent, weighed by soft economic data, including a slump in home building, and a lower outlook from tech heavyweight Hewlett-Packard Co.
U.S. factory output slipped for the first time in 10 months in April as a shortage of parts from Japan crimped activity and home building slumped, showing the economy got off to a weak start in the second quarter.
Signs of lackluster economic activity were also evident in declining sales at Wal-Mart Stores
As long as investors remain jittery about U.S. economic growth, investment in Japanese manufacturers may be subdued, said Yutaka Miura, a senior technical analyst at Mizuho Securities.
London copper firmed Wednesday, but analysts said gains may be capped as disappointing U.S. data raised more doubts about the global economic recovery.
But amid the U.S. slowdown, the state of the housing market, a big copper user, comes as no surprise, especially after tornadoes lashed parts of the country last month. Home construction only accounts for about 2.2 percent of U.S. GDP.
On a day-to-day basis, it is almost impossible to predict market movements, said Khiem Do, chairman of the Asia multi-asset team at Barings Asset Management in Hong Kong.
The U.S. is going through a period of consolidation, but it's still growing. It's not going back to recession, it's just a deceleration. There's nothing too big to worry about.
The euro was steady against the dollar at $1.4274 after recovering from recent lows, but wariness over sovereign debt problems in Europe made investors nervous about piling up euro positions, although traders said signs of clarity in the issue may prompt some buying back of the single currency.
I feel that the euro-zone debt issue has stabilized slightly for the near term after European finance ministers approved a loan scheme for Portugal, prompting buying back of the euro, said Teppei Ino, a currency analyst at Bank of Tokyo-Mitsubishi UFJ.
Europe's top financial officials broke a taboo Tuesday and acknowledged for the first time that Greece may have to restructure its debts, a move which could stoke Europe's sovereign debt crisis.
The U.S. dollar index <.DXY>, a measure of the U.S. dollar against a basket of currencies, was off 0.31 percent.
GOLD, CRUDE EDGE UP
Gold rose to $1,492.26, after falling for three consecutive sessions. Again, worries about the euro-zone's debt crisis lent support, despite news this week that billionaire financier George Soros dumped almost his entire $800 million stake in bullion investment in the first quarter.
U.S. crude futures bounced back after ending at a 12-week low following industry data that showed a surprise drop in U.S. product inventories.
London Brent crude for July delivery was up 54 cents at $110.53 a barrel, after settling down 85 cents.
NYMEX crude for June delivery was up 79 cents at $97.70 a barrel, after rising to as high as $98.00 earlier.
(Additional reporting by Ayai Tomisawa and Chikafumi Hodo; Editing by Matt Driskill)