TOKYO: Asian shares hovered near two-month lows on Thursday as softer oil and copper prices and uncertainty over U.S. policy kept many investors on the sidelines, even as some high-tech bellwethers bounced back after a searing sell-off.
MSCI's broadest index of Asia-Pacific shares outside Japan was barely changed. It has slipped 4.7 percent from a 10-year peak hit on Nov. 23 as investors booked profits after robust gains this year.
While some technology bellwethers such as Tencent and Alibaba rebounded, many others including materials shares, such as Korea's Posco, were sluggish.
In Japan, the Nikkei gained 1.3 percent after having suffered its biggest fall since late March on Wednesday.
Investors are looking to final tax reform legislation in the United States, where a potential U.S. government shutdown looms if Congress fails to agree on a spending package.
There are also fears of a violent backlash in the Middle East from President Donald Trump's recognition of Jerusalem as Israel's capital.
"I would say markets are going through a healthy correction after their rallies during the past three months, or six months. I don't think we need to panic," said Hirokazu Kabeya, chief global strategist at Daiwa Securities.
MSCI's gauge of stocks across the globe stood near Wednesday's two-week low while Wall Street's benchmark S&P 500 index edged down for its fourth straight session of losses.
A relentless selloff in U.S. technology shares, which has pressured global equities in recent weeks, subsided somewhat with S&P technology shares bouncing slightly 0.75 percent.
But the energy sector dragged the U.S. market lower overnight as oil prices dropped.
Oil prices flirted with two-week lows after a big fall on Wednesday, when a sharp rise in U.S. inventories of refined fuel suggested demand may be flagging, while U.S. crude production hit another weekly record.
U.S. West Texas Intermediate crude futures traded at $56.14 per barrel, up 0.3 percent in Asian trade but not far off Wednesday's low of $55.87.
Brent futures gained 0.3 percent to $61.42 per barrel, after having fallen to $61.13 on Wednesday, its lowest since mid-November.
The price of copper, seen as barometer of global economic health because of its extensive industrial use, also fell sharply earlier this week, raising worries about the world growth outlook.
"When you look at growth in China's industrial output and copper price over the last 10 years, you could say that copper still looks a bit expensive. I wouldn't be surprised to see further drop in copper if investors grow wary of the possibility of slowdown in China's output," said Makoto Noji, senior strategist at SMBC Nikko Securities.
Copper traded at $6,578 a tonne, up 0.4 percent for the day but still not far from a two-month low of $6,507.5 touched on Tuesday.
In the currency market, the dollar stood near a two-week high against a basket of currencies but lacked momentum as many players looked to how the U.S. Republicans in the House and the Senate will bridge differences on tax plans.
The euro fetched $1.1800, having slipped to a two-week low of $1.1780 on Wednesday.
The dollar eased to 112.44 yen, slipping further from Monday's high of 113.09, which was its highest level in more than two weeks.
The British pound was on the defensive after hitting a one-week low of $1.3358 on Wednesday on concerns a Brexit deal may be unlikely before next week's key EU summit due to an impasse over the Irish border.
The pound last traded at $1.3381.
Bitcoin continued to swing wildly, surging 3.5 percent to a new record of $14,095 at one point on cryptocurrency exchange Bitstamp. But by late morning it had pulled back to $13,768, up about 1 percent on the day.
Silver extended its decline since late last month to hit a near five-month low of $15.94 per ounce.