Global markets: Asian shares extend losses, dollar underpinned by retail sales

Asian shares extended losses on Thursday as regional factors outweighed the positive tone from another record Wall Street close, while the dollar index held near seven-month highs after strong retail sales bolstered the U.S. economic outlook.

European markets were seen opening cautiously near 4-1/2-year highs, with financial spreadbetters predicting London's FTSE 100, Paris's CAC-40 and Frankfurt's DAX expected to open flat to 0.2 percent higher.

Steady U.S. stock futures suggested a calm Wall Street start, after the Dow Jones Industrial Average marked another record close on Tuesday, its eighth straight day of rises and pushing it higher into overbought territory.

The MSCI's broadest index of Asia-Pacific shares outside Japan fell for a third straight session as a 1.3 percent slide in its materials sector dragged the whole index down 0.7 percent.

Resources-reliant Australian shares slumped 1.2 percent as sinking iron ore prices took a toll on miners, while fading expectations for an interest rate cut after a strong local employment data also dampened sentiment.

Hong Kong shares fell 0.4 percent, after giving up the last of their 2013 gains on Wednesday. Property developers retreated after two of the territory's leading banks raised mortgage rates for the first time since 2011. Shanghai shares were little changed.

Asia is seeing some breakdown in correlation with overseas markets, with regional bourses are being driven more by local factors, said Frances Cheung, senior strategist at Credit Agricole CIB in Hong Kong.

"In the region, the focus rather is whether China would tighten more aggressively, political risks regarding North Korea or the response of policymakers in terms of currencies. Regional factors are gaining more importance," she said.

China's parliament formally elected heir-in-waiting Xi Jinping as the country's new president on Thursday, completing the country's second orderly political succession since the Communist Party took power in 1949.

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