Asian shares began the week on a plaintive note amid losses on Wall Street and worries over China, while investors braced for a Federal Reserve meeting that might take another small step towards lifting US interest rates.

Japan’s Nikkei slipped 0.5 per cent, while MSCI’s broadest index of Asia-Pacific shares outside Japan lost 0.8 per cent.

In China, the CSI300 index of the largest listed companies in Shanghai and Shenzhen fell 1 per cent, with sentiment still soured by a poor PMI survey on manufacturing.

Australia’s main index fell 0.2 per cent as mining stocks struggled with the slump in global commodity prices.

Both copper and the Thomson Reuters CRB commodities index hit their lowest in six years. Early Monday, copper futures were off another 0.1 per cent.

FOMC meet

The Fed’s policy-setting Open Market Committee meets on Tuesday and Wednesday and is considered highly unlikely to lift interest rates just yet, though it does still seem set on a move in September.

“We expect Fed voters to pull the trigger in September, but for the path to interest rate normalisation to be a long one given the global risk profile, the lack of inflationary pressure, and concerns over what moving too quickly may do to asset markets, particularly the dollar, and the wider economy,’’ said analysts at Australia and New Zealand Banking Group.

Expectations of a hike have slowly pushed up US Treasury yields and widened the dollar’s premium over the euro. Yields on two-year US notes pay around 90 basis points more than German debt, near the widest since early 2007.

The single currency was a shade firmer at $1.0990 on Monday, but not far from recent lows around $1.0810.

The dollar was 0.1 per cent lower against a basket of currencies at 97.146. It was steady on the yen at 123.68 having spent the past few sessions wandering aimlessly between 123.54 and 124.48.

US economic growth

A first estimate of US economic growth for last quarter is due on Thursday and is expected to show a rebound of 2.7 per cent annualised, from the first quarter's weather-induced contraction.

The Dow ended Friday down 0.92 per cent, while the S&P 500 lost 1.07 per cent and the Nasdaq 1.12 per cent. For the week, the Dow fell 2.9 percent while the S&P 500 lost 2.2 per cent and the Nasdaq 2.3 per cent.

Wall Street has been weighed in part by concerns that a high US dollar and sluggish global demand was pressuring corporate profits, a theme that should wend its way through this week’s busy diary of earnings.

As well as blue-chip names such as Pfizer and Exxon Mobil, there are a range of social media stocks that have led the market so far in 2015 including Facebook, Cigna, Twitter and LinkedIn.

In the energy market, Brent crude was quoted 5 cents lower at $54.57 a barrel and near its lowest since March. US crude was off 11 cents at $48.03.

Gold seemed to have steadied after its recent slide, with spot bullion at $1,097.90 an ounce.

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