Asian shares slip as crude resumes drop

Asian shares wobbled on Tuesday as crude oil prices slid on rekindled oversupply fears and after downbeat manufacturing data raised concerns about global momentum.

MSCI's broadest index of Asia-Pacific shares outside Japan .US was down 0.2 percent, while Japan's Nikkei slipped 0.7 percent.

US crude oil CLc1 was down about 0.8 percent at $31.38 a barrel after skidding as much as 7 percent overnight, pressured by weak economic data from China, a U.S. forecast for mild weather and doubts suppliers would be able to agree on steps to address the global supply glut. [O/R]

Brent April crude futures LCOc1 ended Monday's trading down 4.9 percent. Oil prices remain above 12-year lows plumbed last month, but faced fresh pressure from Chinese manufacturing data for last month released on Monday showing the fastest pace of contraction since 2012.

Investors awaited the outcome of the Reserve Bank of Australia's policy meeting, expected at 0330 GMT. All 32 economists polled by Reuters predicted that the central bank will hold interest rates steady at a record low of 2.0 percent, where they have stood since May 2015.

"While economic conditions have been uneven and overall growth a little disappointing, the labour market has remained strong," Sean Callow, senior currency strategist at Westpac in Sydney, said in a note to clients.

"The housing and service sectors have also performed well, supported by lower rates and a lower AUD," he said. The Australian dollar edged down about 0.1 percent to $0.7106 AUD=D4, but held above its recent seven-year trough of $0.6827.

The greenback edged down slightly against its Japanese counterpart to 120.97 yen JPY=, but remained underpinned by the Bank of Japan's surprise move on Friday to adopt negative interest rates.

January surveys of global factory activity on Monday showed the new year began much as the old one ended, with too much capacity chasing too little demand.

Global manufacturing expansion accelerated slightly but remained weak at the start of 2016 as faster growth in developed markets failed to offset a contraction in emerging economies.

U.S. economic data showed manufacturing activity contracted in January for a fourth straight month as factories grappled with a strong dollar and lower oil prices forced energy firms to further cut spending, but the pace of the decline appeared to be slowing.

The euro was slightly higher at $1.0896 EUR=, mired in recent ranges and feeling pressure disappointing euro zone manufacturing data as well as comments from European Central Bank President Mario Draghi.

The central bank head stressed the risks facing the euro zone and reiterated the ECB was ready to review its monetary policy stance in early March.