Asian markets stuttered Thursday after New York equities retreated from record highs, with weak economic data around the world offsetting a forecast-beating earnings season.
While the mood on trading floors remains broadly positive after a blockbuster start to the year, there are lingering concerns that growth in most parts of the world is well off the pace of the United States.
A dive in German business sentiment -- the latest soft reading from the European Union -- a growth forecast cut by the Bank of Canada and a drop in Australian inflation were enough to keep US traders from building on Tuesday's records.
"Investors were dealt with another economic reality check as financial data from Europe remains as sick as ever, this despite a chorus of global central banks stimulus," said Stephen Innes at SPI Asset Management.
"The weak EU economy is perhaps raising some doubts as investors spent most of the day in self-analysis mode while taking stock of their stocks."
There was further negativity in Asia, with South Korea on Thursday reporting its biggest quarterly contraction since late 2008. The 0.3 per cent drop was also its first negative since the last three months of 2017.
The data comes after investors have been on a buying spree for much of the year, fuelled by optimism that China and the US will hammer out a deal to end their trade war, as well as central bank dovishness.
Shanghai was the main loser, ending down 2.4 per cent on concerns the Chinese government could ease up on a recent run of mini stimulus measures that have supported the economy and equities in recent months.
Hong Kong fell 0.7 per cent in the afternoon, Seoul dropped 0.5 per cent and Singapore was off 0.2 per cent, with Manila and Jakarta also lower. However, Tokyo edged up 0.5 per cent, Taipei added 0.1 per cent and Mumbai put on 0.3 per cent.
Sydney and Wellington were closed for a public holiday.
'Time will tell'
OANDA senior market analyst Jeffrey Halley said: "Time will tell if the US and China lift the rest of the world up or the rest of the world puts the brakes on the US and China. That's a story for another day but will undoubtedly make the second half of 2019 as interesting as the first."
Broad unease on trading floors weighed on currencies, with the dollar up against higher-yielding units. The South Korean won shed 0.9 per cent, hit by the growth data, while Mexico's peso shed 0.7 per cent and the South African rand dropped one percent.
On oil markets both main contracts edged up slightly after Wednesday's retreat from 2019 highs, following data pointing to a rise in US inventories.
Expectations are for the commodity to resume its upward march with supplies from OPEC and Russia capped, Venezuela embroiled in crisis and Libya hit by unrest.
Meanwhile, the US removal of waivers that allowed countries to buy from sanctions-hit Iran is expected to hit supplies, though analysts are keeping watch on the region and whether OPEC responds by opening up the taps.
"Frankly, Iran is a smouldering firecracker set in the Middle East powder keg, suggesting that on the slightest of flare-ups oil prices are gapping higher," said Innes.
In early trade London fell 0.2 per cent, while Paris and Frankfurt each dropped 0.1 per cent.