Asian stocks stalled on Wednesday following declines on Wall Street, while the dollar held on to modest gains after a rise in U.S. inflation. Spreadbetters forecast a slightly lower open for Britain's FTSE .FTSE, Germany's DAX .GDAXI and France's CAC .FCHI. European shares ended the previous session at their highest levels in over seven years on forecast-beating business surveys. MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS edged up 0.2 percent after a small bounce the previous day. South Korean and Australian shares were little changed, while the volatile Shanghai Composite Index .SSEC lost 1 percent as investors took profits after 10 straight daily gains. China's benchmark indexes have climbed some 55 percent since the central bank unexpectedly cut interest rates in November to support the slowing economy. Expectations for more easing have added fuel to the rally. "The market is a bit crazy now. Even migrant workers are beginning to open stock accounts," Shen Zhengyang, Shanghai-based analyst at Northeast Securities said. "Volatility would naturally increase," he said. Japan's Nikkei, which has been hitting a succession of 15-year highs, .N225 rose 0.2 percent. "These themes (better earnings and shareholder returns) as well as increasing wages will likely continue attracting foreign investors in the longer term," said Jun Yunoki, a strategist at Nomura Securities in Tokyo. The Dow .DJI and S&P .SPX both shed 0.6 percent overnight as U.S. equities maintained a loose inverse correlation with the dollar. The strength of the greenback, which earlier in the month soared to multi-year highs against its peers, has become a concern due to its potential negative impact on U.S. corporate earnings. The euro was little changed at $1.0925 EUR= after slipping from an overnight peak of $1.1029 briefly reached on the upbeat euro zone data. The common currency has steadily recovered from a 12-year low of $1.0457 hit last week after a dovish-sounding Federal Reserve dimmed prospects for an earlier interest rate hike and blunted the dollar's advance. The dollar was steady at 119.61 yen JPY= following an overnight bounce from a low of 119.22. A decline in U.S. Treasury yields limited the dollar's gains. The U.S. currency was still some distance from an eight-year peak of 122.04 scaled two weeks ago when expectations for an earlier Fed rate hike were stronger. The yield on benchmark 10-year Treasury notes US10YT=RR slipped to a six-week low overnight thanks to a weaker Wall Street, with the debt market brushing aside a 0.2 percent rise in U.S. February consumer price index. ECONUS The drop by the 10-year Treasury yield is an indication "that while equities are pricing in Fed tightening, bond traders are not concerned about rising rates," Kathy Lien, managing director for FX strategy at BK Asset Management wrote in a note to clients. In commodities, Brent crude oil bounced slightly after falling the previous day on the dollar's strength and persisting fears of global oversupply. [O/R] Brent crude LCOc1 rose 0.3 percent to $55.27 a barrel. Source: Reuters
