Singapore: Asian stock investors joined a global retreat from riskier assets on Friday and the dollar wavered on raising doubts about U.S. President Donald Trump's ability to deliver his economic agenda.
European stock markets are also set for a negative start, with financial spread better CMC Markets expecting Britain's FTSE 100 to open 0.5 percent lower, and Germany's DAX and France's CAC 40 to start the day down 0.7 percent.
Confidence was shaken further after a van mowed through crowds of tourists in Barcelona on Thursday, killing at least 13 people and injuring more than 100 in an attack that authorities were treating as Islamic terrorism.
In Cambrils, a town south of Barcelona, police said they had killed five attackers on Thursday night to thwart a linked "terrorist attack."
The MSCI World index slipped 0.1 percent, adding to Thursday's 0.8 percent drop and heading for a flat end to the week.
MSCI's broadest index of Asia-Pacific shares outside Japan dropped 0.5 percent, but still looked set to gain 1.4 percent for the week after tensions between North Korea and the United States came off the boil.
Japan's Nikkei slid 1.2 percent on global jitters and a stronger yen, and looked set to lose 1.4 percent for the week.
"The realization of the worst case scenarios (in Washington and in North Korea) would likely bring about a more significant drop in global equity markets," said Jingyi Pan, market strategist at IG in Singapore.
Until then, "sentiment may remain the driver for the fluctuations in the markets and could make for good entry opportunity for regional markets," she added.
Chinese blue chips slipped 0.2 percent, after data showed growth in new home prices slowed in July, but looked set for a 1.9 percent weekly gain as a year-long construction boom boosted shares of building materials firms.
Hong Kong's Hang Seng retreated 0.7 percent, up 1.05 percent for the week.
Overnight, Wall Street's major indexes slumped between 1.2 percent and 1.9 percent. The S&P 500 index posted its biggest drop in three months.[.N]
Concerns have grown over Trump's ability to push through his economic goals, such as tax cuts and infrastructure spending, following the exodus of executives from two prominent business councils in reaction to his response to clashes last weekend in Charlottesville, Virginia.
Trump on Thursday decried the removal of pro-slavery Civil War Confederacy monuments, which have fueled U.S. racial tensions, stoking worries that some of his key policy staffers and aides may quit.
Chief among them were rumors that Gary Cohn, director of the National Economic Council, would resign, following Trump's defense of white supremacist protesters in Charlottesville.
A statement from the White House that Cohn intends to remain in his position calmed markets only briefly before selling resumed.
"Diminishing West Wing support from both business and political allies will continue to abrade investors’ confidence in President Trump’s economic agenda," Stephen Innes, head of Asia Pacific trading at OANDA in Singapore.
"The dollar, for the most part, remains in a state of directionless confusion, supported on the one hand by resurgent U.S. economic data yet burdened by the expanding White House rat’s nest."
The dollar posted its third session of losses against the yen, falling 0.25 percent to 109.31 yen and shrinking this week's gains to 0.3 percent.
The dollar index, which tracks the greenback against a basket of six major peers, was flat at 93.597, surrendering moderate early gains.
The index rose earlier on weakness in the euro, the biggest component of the basket, after minutes of the European Central Bank's July meeting showed policymakers were worried about a possible overshoot in the common currency, whose strength is making the bloc's exports less attractive and imports cheaper.
The euro inched up 0.1 percent to $1.1736, making up some of the previous session's 0.4 percent drop.
Bitcoin, which hit an all-time high of $4,480 in the previous session before closing lower, inched up 0.2 percent to trade at $4,285, up 17.6 percent this week.
In commodities, oil prices pulled back following recent gains.
Global benchmark Brent fell 0.1 percent to $50.99 a barrel, after jumping 1.5 percent on Thursday on a drop in U.S. inventories. It is on track for a 2.15 percent decline for the week.
U.S. crude also lost 0.1 percent to $47.05 on Friday, surrendering some of Thursday's 0.7 percent gain, heading for a 3.6 percent weekly loss.
Spot gold was steady on Friday at $1,286.85 an ounce, holding most of Thursday's 0.4 percent gain. It is set to end the week down 0.1 percent.
Industrial metals, which posted multi-year highs this week, waned on Friday as investors took profits.
Three-month copper on the London Metal Exchange was down 0.3 percent to $6,468.50 a tonne, extending Thursday's 0.6 percent drop.
Benchmark zinc, which set a new decade high of $3,147 a tonne on Thursday, closed lower but was up 1.05 percent at $3,094.50 on Friday.