Asian shares snap winning streak, oil down

SINGAPORE, Oct 3 (Reuters) Asian shares edged lower on Tuesday with energy stocks such as INPEX and Woodside Petroleum hit by a sharp fall in oil prices, as the region's top indexes looked set to end a run of gains.

The Nikkei average fell 0.41 per cent by midday, after posting gains in the past four sessions, after Goldman Sachs cut ratings on tech heavyweights including Sony Corp. and Pioneer Corp.

MSCI's broadest index of shares elsewhere in Asia was down around 0.16 percent by 0240 GMT.

Energy shares such as Japan's INPEX and Australia's Woodside fell as oil extended Monday's 3-per cent slide, thanks to healthy US fuel inventories.

Oil, which has fallen sharply since hitting a high of .40 in July, has been testing the mark over the past week. At 0239 GMT, US crude was trading at .97.

Crude's decline also dragged on gold prices, reducing the metal's safe-haven appeal as a hedge against inflation. Gold slipped to 6/597 an ounce from 7.50/598.25 an ounce late in New York on Monday.

A negative lead from Wall Street and data showing US manufacturing growth easing to its slowest pace in more than a year in September also weighed on sentiment.

The dollar also stayed under pressure as a result of the US data, bolstering speculation that a slowing economy could prompt the Federal Reserve to cut interest rates.

The dollar fell after the Institute for Supply Management's manufacturing index eased in September, but traders said it was too early to say whether the data would trigger lasting losses in the currency.

''The weak ISM was a bit of a surprise, so the dollar's down,'' said Takehiko Jimbo, forex manager at Mitsubishi Trust and Banking.

At 0242 GMT, the dollar was little changed at 117.67 yen near the low of 117.53 yen touched in New York after the ISM's factory activity index fell to 52.9 last month from 54.5 in August, hitting its lowest level since May 2005.

ENERGY SAPPED Australia's benchmark S&P/ASX 200 Index fell by about 0.3 percent, snapping a six-day winning streak.

Australia's top independent oil and gas company Woodside Petroleum Ltd. was down about 2.6 per cent. A host other energy-related stocks also fell.

BHP Billiton Ltd./Plc., the world's top miner, slipped around 0.5 per cent due to a fall in base metals prices.

South Korean financial markets were closed for a public holiday and will reopen on Wednesday.

Taiwan stocks, which hit a 4-1/2-month closing high on Monday, were flat, while the benchmark Hang Seng index in Hong Kong was around 0.6 per cent lower.

Japanese government bond futures were slightly higher, supported by gains in US Treasuries despite wariness after the previous day's sell-off and caution ahead of a 10-year bond auction.

JGBs had tumbled on Monday after the Bank of Japan's tankan showed business confidence at big manufacturers rising to a two-year high, reinforcing market expectations for a BOJ rate rise possibly early next year.

The benchmark 10-year JGB yield was unchanged at 1.725 per cent.

REUTERS AKJ RK1015