(Recasts, updates prices)
* Asian stock markets : https://tmsnrt.rs/2zpUAr4
* Oil prices surge on fears of global supply disruption
* China industrial output growth weakens, hits risk appetite
* Stocks slip, safe-haven gold and Japanese yen rise
By Swati Pandey
SYDNEY, Sept 16 (Reuters) - Oil surged to four-month highs
on Monday after weekend attacks on crude facilities at key
producer Saudi Arabia sparked supply fears, while shares in Asia
extended losses as bleak economic data from China sapped
investor risk appetite.
Crude futures LCOc1 Clc1 on both sides of the Atlantic
hit their highest since May, but came off their peaks after U.S.
President Donald Trump said he had authorized the use of the
U.S. emergency stockpile to ensure stable supplies. O/R
Trump also said the United States was "locked and loaded"
for a potential response to the strikes on the Saudi facilities,
which shut 5% of world production, after a senior official in
his administration said Iran was to blame.
Worries about tensions in the Middle East and worsening
relations between Iran and the United States powered safe-haven
assets, with gold XAU= rising 1% in early Asian trade to
$1,503.09 per ounce. GOL/
"If risk appetite collapses due to fears of worsening Middle
East tensions in the wake of any retaliation to the ... attacks,
some emerging markets could face a double whammy of pressures,"
said Mitul Kotecha, Singapore-based senior emerging markets
strategist at TD Securities.
He noted that the Indian rupee INR=D3 , Indonesian rupiah
IDR=D3 and Philippine peso PHP=D3 were the most risk
sensitive currencies in Asia.
Indonesian stocks .JKSE opened 2% lower on Monday, marking
biggest intraday drop since Aug.6.
MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS slipped 0.44% to 513.3 after data showed China's
industrial production growth skidding to its weakest pace in
17-1/2 years in August. Painting a dour picture of the world's second-biggest
economy, China's statistics bureau said the country faces
increasing downward pressure from external uncertainties.
China's blue-chip index .CSI300 eased 0.2% while Hong
Kong's Hang Seng index .HSI faltered about 1.2%.
Liquidity was relatively thin with Japanese markets shut for
a public holiday.
E-Minis for the S&P 500 ESc1 were off 0.7% while those for
the Dow 1YMc1 fell 0.6%. AND CURRENCIES
Among major currencies, the Saudi news pushed the yen JPY=
up 0.3% to 107.74 per dollar while the Canadian dollar CAD=D3
rose 0.5% in anticipation of higher oil prices.
The euro EUR=D3 was little moved near a three-week top
while the pound GBP=D3 stepped back from Friday's two-month
highs. That left the greenback down 0.1% at 98.126 against a
basket of six major currencies .DXY .
The risk-sensitive Australian dollar was down 0.5% against
the yen AUDJPY= , snapping nine straight days of gains. The
kiwi dollar NZDJPY=R slipped to a one-week low on the yen.
"One immediate question this (attack) poses for bond markets
is whether a further rise in the inflation expectations
component of bond yields - which have proved historically
sensitive to oil prices - will give this month's sharp bond
market sell-off fresh impetus," said NAB analyst Ray Attrill.
"Or will safe-haven considerations dominate to drive yields
lower?"
In early Asian trading, futures for U.S. 10-year Treasury
notes TYv1 rose 0.3%, indicating yields may slip when cash
trading begins. Global bonds were sold off last week, sending yields higher,
led by a broader risk rally on hopes the United States and China
would soon end their long trade war. Better-than-expected U.S.
retail sales data also boosted sentiment.
Investors next await the outcome of the U.S. Federal
Reserve's policy meeting on Wednesday at which it is widely
expected to ease interest rates and signal its future policy
path. FEDWATCH
Asia stock markets https://tmsnrt.rs/2zpUAr4
Asia-Pacific valuations https://tmsnrt.rs/2Dr2BQA
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(Editing by Sam Holmes and Himani Sarkar)