Asia slips as commodities languish, Canada vote weighs on loonie

By Shinichi Saoshiro

TOKYO (Reuters) - Asian equities were mostly lower on Tuesday after commodity prices languished in the wake of China's soft growth data and dampened risk sentiment.

The euro hovered near a 10-day low ahead of a European Central Bank meeting that could open the door for yet more monetary easing.

With risk appetite flagging in Asia, spreadbetters expected a slightly lower open for Britain's FTSE (FTSE), Germany's DAX (GDAXI) and France's CAC (FCHI).

The Canadian dollar, already under pressure from sliding crude oil prices, faced extra headwinds as Canada's Liberal Party was tipped to won Monday's general election which would pave the way for increased government spending.

Canada's major television networks projected Justin Trudeau's Liberals would topple Prime Minister Stephen Harper's Conservative government, which is known for its fiscal frugality.

The Canadian dollar, or loonie, weakened 0.2 percent to C$1.3039 to the dollar after slumping 0.9 percent overnight on the prospect of voters opting for a prime minister who plans to run deficits to increase infrastructure spending.

"CAD is under modest downside pressure versus USD and AUD after the Liberals unexpectedly won (based on projections) a majority government for the first time since 2004. The Liberals have a mostly inexperienced team about to govern the country and that may be unsettling the markets a bit," said Elias Haddad, director of currency and international economics at the Commonwealth Bank of Australia in Sydney.

MSCI's broadest index of Asia-Pacific shares outside Japan (MIAPJ0000PUS) shed 0.5 percent.

Shanghai shares (SSEC) dropped 0.1 percent and Hong Kong's Hang Seng (HSI) retreated 0.5 percent. Japan's Nikkei (N225) bucked the trend and gained 0.4 percent.

Australian stocks (AXJO) lost 0.6 percent as worries about China weighed on mining and energy stocks following Monday's China GDP data.

"The official GDP figures show growth slowed to 6.9% y/y in Q3, down from 7.0% y/y in both Q1 and Q2. Unfortunately, these figures need to be taken with a pinch of salt," economists at Capita Economics wrote.

"Flaws with how the GDP deflator is calculated, along with political pressure to meet growth targets that have become increasingly at risk, have meant that official growth rates have not slowed as quickly as most third party measures of growth in recent years."

Three-month copper on the London Metal Exchange lost 0.3 percent to $5,185.50 a metric ton after shedding 1.4 percent overnight, while Brent crude oil (LCOc1) crawled up 0.4 percent to $48.82 a barrel on short-covering after sinking 3 percent overnight as China's latest data added to concerns over global growth.

"Pressure on the metals and mining industry has been unrelenting and to be honest, doesn't look like improving any time soon," said commodity strategist Daniel Hynes at ANZ in Sydney.

"The data out yesterday was particularly worrying for commodities considering electricity production, industrial production, fixed asset investment all fell. There's been an implicit feeling that demand would pick up in the fourth quarter. Those numbers potentially derail that outcome."

In currencies, the euro struggled as investors braced for the ECB potentially flagging additional easing measures when its policymakers meet on Thursday.

The common currency was little changed at $1.1334 after reaching a 10-day trough of $1.1306.

The dollar was nearly flat at 119.51 yen while the dollar index (DXY) also held steady at 94.895 after a 0.2 percent gain overnight.