Stocks retreat slightly from multi-year highs

By Richard Hubbard

LONDON (Reuters) - Investors pulled some profits from soaring European and Japanese shares on Thursday, although a run of relatively upbeat economic data and continued support from central banks kept equities near multi-year highs.

U.S. stock futures also slipped, suggesting a subdued Wall Street open where this week's rally has taken the Standard & Poor's 500 Index <.spx> and the Dow Jones industrial average <.dji> to record peaks.

Oil prices dipped on a combination of weakening demand and rising supplies. The euro was stronger against the dollar.

Europe's broad FTSE Eurofirst 300 index <.fteu3> slipped from a near five-year high to be down 0.2 percent. Germany's DAX and Britain's FTSE 100<.ftse> were 0.1 percent lower.

Robust German factory activity and China's stronger than expected trade performance have boosted investor sentiment this week with the mood enhanced by data showing strong UK industrial output in March and jobs growth in Australia and New Zealand.

But analysts have cautioned that the positive surprises in the recent numbers, including last week's strong monthly U.S. payrolls number, do not necessarily herald full scale recovery.

"We've seen a bit of stabilization and positive surprises in the data recently, but we need to careful about reading too much into it," said Morgan Stanley strategist Ian Stannard.

The MSCI world index <.miwd00000pus>, which tracks stocks in 45 countries, was down 0.15 percent on Thursday but not far from the five-year highs hit this week, driven mainly by the loose monetary policies of the world's big central banks.

Earlier MSCI's broadest index of Asia-Pacific shares outside Japan <.miapj0000pus> edged up 0.1 percent despite data showing China's annual consumer inflation rising more than expected in April and its factory prices falling.

EUROPEAN SURPRISE

The euro gained for a third straight day against the dollar. Investors were encouraged by the upbeat German factory activity which has offset worries about a wider slowdown across the region in the second quarter.

The recent run of encouraging data extended to Spain and the Britain on Thursday which both reported some improvements in factory activity for March.

British industrial output rose a more-than-expected 1.1 percent in March though it was down on the year, while in Spain the output decline slowed to its lowest rate in 19 months during March, although the manufacturing sector is still shrinking.

Any gains in the euro, however, from slightly more positive euro area data are expected to be limited by signs the European Central Bank could ease its monetary policy further to support the euro zone economy.

The euro was little changed $1.3150 with traders citing offers to sell as it approaches the $1.32 level.

"Investors have been focusing on the good German data and ignoring the soft patch elsewhere," said Peter Kinsella, currency strategist at Commerzbank.

Meanwhile investors drove the Australian and New Zealand dollars up after the surprisingly strong jobs data lifted both currencies from lows struck after their central banks moved this week to tame their strength.

In the oil market Brent crude fell below $104 a barrel as worries about future demand and signs of rising supplies pointed to a growing surplus of fuel worldwide.

"Oil supply is improving and demand growth is not as rapid as expected," said Natixis oil analyst Abhishek Deshpande.

U.S. crude futures fell 0.2 percent at $96.46 a barrel and Brent was down 0.5 percent at $103.85.

(Editing by Jeremy Gaunt)

Source: http://news.yahoo.com/asian-shares-gain-upbeat-global-data-wall-st-030044924.html

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