GLOBAL MARKETS-Global shares lose steam on weak U.S. retail sales, Brexit in focus

* U.S. retail sales fall for first time in 7 months

* Upbeat U.S. earnings cushion blow from data

* Sterling volatile as Brexit talks continue

* Asian stock markets: https://tmsnrt.rs/2zpUAr4

By Hideyuki Sano

TOKYO, Oct 17 (Reuters) - Global stocks barely moved on

Thursday as soft U.S. 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 .MIAPJ0000PUS and Japan's Nikkei .N225 were little

changed in early trade while U.S. stock futures ESc1 lost

0.15%.

The S&P 500 .SPX shed 0.20% the previous day after data

showed U.S. 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 U.S. consumption has been one of few remaining bright

spots in the global economy, the data fanned worries about a

global recession.

U.S. Treasury Secretary Steven Mnuchin said on Wednesday

that U.S. and Chinese trade negotiators were working on nailing

down a Phase 1 trade deal text for their presidents to sign next

month.

But he also said there were no plans for another high-level

meeting on the trade deal outlined last week.

"While the U.S. suspended a hike in tariffs, it hasn't gone

as far as scrapping the tariffs altogether, so it is hard to

expect a quick pick-up in the economy," said Yoshinori Shigemi,

global market strategist at JPMorgan Asset Management.

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%

for the quarter, according to Refinitiv data.

Bank of America BAC.N shares rose 2.0% following its

quarterly results. Netflix NFLX.O rose 9.9% in after-hours

trade after its earnings beat Wall Street estimates.

In the currency market, soft U.S. retail sales took the

shine out of the dollar.

The dollar index =USD fell 0.30% on Wednesday and last

stood at 97.964, having touched its lowest since Aug. 27.

Against the yen the dollar slipped to 108.73 yen JPY= ,

after peaking at 108.90 on Tuesday.

The euro stood at $1.1075 EUR= , up 0.04% so far in Asia,

near a one-month high of $1.1085 hit in U.S. trade on Wednesday.

Sterling traded at $1.2823 GBP=D4 , having risen to as high

as $1.2877 on Wednesday, its loftiest level since mid-May.

It has risen more than 5% 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.

In one sign of investor caution, in currency option markets,

risk reversal spreads in sterling GBP1MRR=FN turned in favour

of pound puts after briefly favouring pound calls earlier this

week, meaning demand to protect the currency's downside is

stronger than that for the upside.

The Turkish lira steadied off seven-week lows as U.S.

President Donald Trump's sanctions for Turkey's military

incursion into Syria were perceived to be lighter than expected.

Lira bears also suffered a flashback of their suffocating

March squeeze as the authorities moved to keep a lid on

volatility by restricting the supply of lira to overseas

counterparts.

The lira stood at 5.8825 per dollar TRYTOM=D3

Oil prices eased after U.S. data showed a

larger-than-expected build in U.S. crude stocks. Brent crude LCOc1 futures fell 0.82% to $58.93 a barrel

while U.S. West Texas Intermediate (WTI) crude CLc1 lost 1.01%

to $52.82 per barrel.