Asia stocks lower amid growth worries; oil rebounds

SHANGHAI (Reuters) – Asian shares drifting down on Monday as the country's economy is growing.

MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.07 percent, trimming over losses in Chinese shares, but struggling to break into positive territory.Australian shares added 0.13 percent, while Japan's Nikkei stock index gained 0.11 percent.

A combination of weak factory-gate inflation in China and low oil prices weighed on global stocks on Friday, dragging MSCI's gauge of global stocks to its worst day in two weeks. The index was last 0.09 percent lower.

Kevin Lai, chief economist for Asia ex-Japan at Daiwa Capital Markets, commented on China's economic growth in general and its significant debt burden in particular.

"There's no way the economy can really get back on a nice recovery path unless they can seriously compress the debt … all this deleveraging we've been talking about not really delivering any results," he said.

E-commerce giant Alibaba Group Holding Ltd. added to the uncertain outlook in China, recording the slowest-ever annual growth in sales for its annual "Singles' Day" event ,.

Its tensions have weakened amid rising tensions between China and the United States that have taken a bite out of China's economy.

An index tracking consumer staples firms in China was 0.95 percent lower, even as the blue-chip CSI300 index rebounded from last week's 0.68 percent.

Risk asset markets have been influenced by global market and investment risk.

A spike in U.S. bond yields, driven by the Federal Reserve's commitment to keep raising borrowing costs, has also shaken emerging markets as investors poured money into U.S. dollar assets.

The Dow Jones Industrial Average fell 0.77 percent on Friday, the S & P 500 lost 0.92 percent and the Nasdaq Composite dropped 1.65 percent.

The yield on US 10-year Treasury bonds benchmark closed at 3.189 percent on Friday.

The Wall Street losses after the Fed.

The Fed 's stance is disappointed by the fact that it' s more likely that it 's going to be more expensive.

"Markets are pricing in a pipeline," analysts at ANZ said in a morning note.

SAUDI PRODUCTION CUT

Taking some pressure off a sharp drop in prices last week, Saudi Arabia's energy minister said on Sunday that it's 500,000 barrels per day in 0.5 percent.

That helped to lift prices on Monday, with U.S. crude rising 1.08 percent to $ 60.84 a barrel and Brent crude gaining 1.34 percent to $ 71.12 per barrel.

However, Saudi Arabia's supply is likely to be a global growth solution, with two of the world's largest economies – Germany and Japan – expected to report a contraction in output in coming days.

"Supply-side surprises appear to be the main focus, but concern that global demand is likely to be creeping into markets and weighing on risk appetite," the ANZ analysts said.

In currency markets, the dollar rose 0.18 percent against the yen to 114.03, and the euro was down 0.11 percent on the day at $ 1.1322.

The dollar index, which tracks the greenback against a major rival, was up 0.12 percent at 97.022.

The British pound was off 0.35 percent to fetch $ 1.2929. A Brexit deal would be achieved.

Spot gold gained 0.07 percent to $ 1,210.09 per ounce.