* Asia stocks fall 0.8 pct on concerns over U.S. recovery
* Euro nears 7-week high as investor shy away from dollar
* Gold, oil recover from multi-week lows
By Kevin Yao
SINGAPORE, July 7 (Reuters) - Asian stocks fell on
Wednesday as investors worried global growth was faltering,
while the euro held near a 7-week high as investors pared long
positions in the dollar on doubts about the resiliency of the
U.S. recovery.
A rebound in world stock markets on Tuesday, mainly
propelled by bargain-hunting, turned out to be short-lived as
data showed growth in the U.S. service sector was slowing, the
latest evidence that its expansion was cooling. []
Wall Street managed modest gains despite the data, but
strong buying interest disappeared by afternoon as bearish
sentiment reasserted itself. []
"Investors are not wholly confident about the global
economic outlook. Recent weaker-than-expected U.S. data is
weighing on sentiment," said Y.S. Rhoo, a market analyst at
Hyundai Securities in South Korea.
The MSCI index of Asia Pacific shares outside Japan
<.MIAPJ0000PUS> shed almost 0.8 percent, resuming its decline
after the previous day's rally, which had been largely spurred
by gains in the beaten-down Shanghai market and an upbeat
assessment of the region's economic outlook from Australia's
central bank.
The MSCI index has lost nearly 9 percent so far this year.
Shanghai stocks <> fell 0.6 percent, a day after
gaining nearly 2 percent on hopes that money will move back
into the oversold market after the completion of Agricultural
Bank of China's mammoth $22.2 billion initial public offering,
which will be the world's largest. []
The Shanghai market, the world's second-worst performer
after Greece, has lost 27 percent since the start of the year
after Beijing took a range of steps to cool surging property
prices.
Japan's Nikkei average <> fell 0.9 percent as shares
of exporters which had gained the day before gave back some of
the gains, but the index remained above a seven-month low hit
on Tuesday.
"There's little short-covering left today because investors
already moved to cover short positions yesterday after the
Nikkei managed to avoid breaking below the 9,000 level," said
Kenichi Hirano, operating officer at Tachibana Securities.
"The verdict has yet to be reached, but a sense of relief
could spread if the Nikkei were to be able to keep above that
level, despite confusion in Europe, a slowdown in America and
volatile currency moves."
The euro <EUR=> hovered near $1.2600, with near-term
resistance around the May 21 high of $1.2670 and support
forming at the July 2 low of $1.2480.
The single currency rose to as high as $1.2662 on Tuesday,
gaining nearly 0.7 percent.
The dollar index <.DXY> edged up 0.1 percent to 84.151,
staying near a two-month low of 83.825 hit this week.
The dollar was steady against the yen <JPY=> at 87.49 yen,
not far from a seven-month low of 86.96 yen hit on EBS last
week. The yen has made solid gains against the greenback in
recent sessions on growing worries about an economic slowdown
in the United States and falling stock markets <.SPX>.
The Australian dollar <AUD=> was firm above 85 U.S. cents,
having jumped over 1 percent on Tuesday.
Meanwhile, spot gold <XAU=> rose as much as $3.60 to
$1,195.85 an ounce, regaining strength after falling to a
six-week low in the previous day.
U.S. crude prices <CLc1> rose 17 cents to $72.15 per
barrel, pulling away from a four-week low hit on Tuesday as
traders bet on a further decline in U.S. oil inventories.
(Editing by Kim Coghill)
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