Global shares lose steam on weak US retail sales, Brexit in focus

Global stocks barely moved on Thursday as soft US retail sales data raised concerns about the health of the world's largest economy and risk of global recession, while sterling was volatile as negotiations on a Brexit deal continued.

Both MSCI's broadest index of Asia-Pacific shares outside Japan and Japan's Nikkei were little changed in early trade while US stock futures lost 0.15 percent.

The S&P 500 shed 0.20 percent the previous day after data showed US retail sales contracted in September for the first time in seven months, in a potential sign that manufacturing-led weakness could be spreading to the broader economy.

"It looks like the trade war has claimed yet another victim, in addition to diminished business confidence and reduced investment spending, as consumers are starting to chicken out," said Chris Rupkey, chief financial economist at MUFG Union Bank.

Given US consumption has been one of few remaining bright spots in the global economy, the data fanned worries about a global recession.

Losses in equities were offset by a solid start to the earnings season, though that is partly because investors have already marked down their expectations substantially, with earnings for S&P 500 companies expected to show a decline of 3 percent for the quarter, according to Refinitiv data.

In the currency market, soft US retail sales took the shine out of the dollar. Sterling traded at $1.2823, having risen to as high as $1.2877 on Wednesday, its loftiest level since mid-May.

It has risen more than 5 percent in the past five sessions on the prospect that the United Kingdom and the European Union can strike a fresh deal to avoid a no-deal exit in the summit on Thursday and Friday.

Investors have welcomed optimistic comments from key officials during last few days. British culture minister Nicky Morgan said late on Wednesday there is a good chance of a deal.

Still, many doubts remained, not the least of which is if British Prime Minister Boris Johnson can ensure his government and factious parliament approve the plan.