The euro struggled to make much headway, having pared gains on Thursday on fresh reports suggesting Europe remains a long way from resolving its debt woes. The single currency was up 0.1 percent against the dollar at USD 1.3770.
Plans to tackle the euro zone debt crisis have stalled, with Paris and Berlin at odds over how to increase the firepower of the region's bailout fund, French President Nicolas Sarkozy said on Wednesday, heightening concerns about how much progress could be made at a summit of European leaders on Sunday.
Investors are looking for more details from the meeting of plans to contain the euro zone sovereign debt crisis, particularly beefing up the rescue fund, a vehicle to guarantee national governments' sovereign debt issuance, although many believe a rapid solution is unlikely.
The meeting is also expected to agree on a plan to recapitalize European banks, but a report in the Financial Times said on Thursday that the plan to strengthen Europe's banking system is set to fall short of market expectations.
MSCI's broadest index of Asia Pacific shares outside Japan fell 0.6 percent, with the materials sector leading the decline, falling 1.5 percent.
Australian shares fell 1.2 percent on Thursday as miners sank after copper and gold prices fell, while Japan's Nikkei stock average opened down 0.4 percent.
The MSCI world stocks index was down 0.3 percent at 297.88, while US stocks ended lower on Wednesday as sentiment was also undermined by the Federal Reserve's Beige Book report, which suggested the outlook for the US economy grew dimmer in September.
Oil edged up in early Asia on Thursday, after falling the day before on concerns about growth. Brent crude futures were up 0.4 percent to USD 108.88 a barrel, while US crude futures edged 0.2 percent higher at USD 86.30 a barrel.
In Asian credit markets, spreads on the iTraxx Asia ex-Japan investment grade index, a gauge for whether investor risk appetite is returning, widened a tad by 1 basis point.
US Treasury prices rose modestly on Wednesday, with benchmark 10-year Treasury notes trading up 4/32 in price to yield 2.16 percent, down from 2.18 percent late Tuesday.
Gold fell for a third consecutive session on Wednesday, moving once again in tandem with riskier assets, as jittery investors sold on a lack of progress over euro zone debt talks and an uncertain US economic outlook. Spot gold was steady at USD 1,641.49 an ounce.
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