Asian shares resumed their decline after paring early losses on Thursday after a sharp fall in mainland Chinese shares on Wednesday rekindled worries about the health of China's economy, and investors awaited the result of a meeting of the European Central Bank. MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS slipped 0.4 percent at 0604 GMT. Japan's Nikkei .N225 ended the day down 0.6 percent. European markets look set to follow suit, with financial spreadbetters expecting Britain's FTSE 100 .FTSE and France's CAC 40 .FCHI to open as much as 0.42 percent lower, and Germany's DAX .GDAXI start the day down 0.35 percent. Thursday's falls stand in sharp contrast to the recovery in many share markets since last month, which was supported by hopes policymakers around the world may take steps to bolster their respective economies. Those hopes will be tested in an event-packed period towards the end of the month that starts with the European Central Bank's policy meeting on Thursday. ECB President Mario Draghi is widely expected to keep the door open for more monetary stimulus in the face of deflation risks, but is seen stopping short of taking new policy steps at Thursday's meeting. That meeting will be followed next week by central bank policy meetings in the U.S. and Japan, as well as four-day leadership meeting of China's Communist party. "I think the rebound in markets is coming to an end. From now, markets will be looking to policy events later this month as well as corporate earnings," said Hirokazu Kabeya, chief global strategist at Daiwa Securities. Wall Street stocks lost momentum overnight, with the S&P 500 .SPX losing 0.6 percent despite earlier gains, failing to extend a rally since late last month beyond its 100-day moving average. Earnings for S&P 500 companies are expected to have fallen about 4 percent in the third quarter, while revenue is expected to have declined 3.8 percent, according to Thomson Reuters data . "The most notable influence on markets recently has been the quarterly reporting in the U.S, which has shown a softening of outcomes relative to expectations," said Angus Gluskie, managing director of White Funds Management in Sydney. The Shanghai Composite stock index .SSEC slumped 3 percent on Wednesday, its worst daily performance in five weeks after a relatively calm month, reminding investors that China's markets and economy are still far from stable.The Shanghai index rose 0.3 percent on Thursday, however, and the CSI 300 index .CSI300 added 0.4 percent, while the Hang Seng index .HSI dropped 0.8 percent on Thursday. The dollar held steady against a basket of six currencies .DXY at 95.015 but fell 0.3 percent to 119.67 yen JPY=. The euro stood at $1.1335 EUR=, barely moving this week ahead of the ECB's meeting. The Australian dollar AUD=D4 reversed an earlier recovery from the one-week low of $0.7202 seen Wednesday, extending losses to $0.7195 on speculation mortgage rate increases by two lenders would lead to policy easing by the central bank. The Canadian dollar CAD=D4 fell to C$1.3149 per U.S. dollar on Thursday, its lowest in 2 1/2 weeks, as the Canadian central bank lowered its growth forecasts for 2016 and 2017. It has since recovered to C$1.3127. Oil prices, which fell to three-week lows as the U.S. government reported a bigger than expected build-up in crude oil stockpiles, recovered some of their losses. Brent futures LCOc1, which dropped to a three-week low of $47.50 per barrel on Wednesday, rose 0.6 percent to $48.13. U.S. crude futures CLc1 settled at $45.43 a barrel, after slumping to $44.86 a barrel, the lowest since Oct. 2, in earlier trade. U.S. natural gas futures NGc1 fell to a three-year low of $2.379 per million British thermal units on Wednesday on forecasts for warmer weather over the next two weeks. They were last trading at $2.397.
