* N.Ireland's DUP says cannot back Brexit deal
* U.S. retail sales fall for first time in 7 months
* Asian shares muted after five-day rally
* Asian stock markets: https://tmsnrt.rs/2zpUAr4
By Hideyuki Sano and Swati Pandey
TOKYO/SYDNEY, Oct 17 (Reuters) - Sterling faltered on fading
hopes of a Brexit deal on Thursday, while a five-session rally
in Asian stocks ran out of steam as weak U.S. retail sales
fanned fears about the health of the world's biggest economy.
South Korean, Australian and New Zealand indexes were all in
negative territory. Chinese shares were slightly higher while
Japan's Nikkei .N225 ended a tad lower. That left MSCI's
broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS mostly unchanged.
Investor focus was shifting to the United Kingdom where
Northern Ireland's Democratic Unionist Party said it could not
support the Brexit deal as it currently stands. The report fueled doubts whether Prime Minister Boris
Johnson can gain approval from his government and Britain's
fractious parliament to exit the European Union with a deal in
place.
Sterling fell 0.5% to $1.2762 GBP=D4 on the news, drifting
from a six-month top of $1.2877 touched on Wednesday.
"Trading the British pound intra-day at the moment is not
for the faint-hearted, with deep pockets required," said Jeffrey
Halley, senior market analyst at OANDA.
"The street clearly wants to take GBP higher on any Brexit
hope, but traders should be aware that the pullback will be
equally as ugly if progress stalls or collapses yet again."
In early European trades, the pan-region Euro Stoxx 50
futures STXEc1 were down 0.4%, German DAX futures FDXc1 were
down 0.3% while those for London's FTSE futures FFIc1 added
0.1% at 7,158.
U.S. stock futures ESc1 were a shade weaker.
Sentiment in the equities market turned dour on Wednesday
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. Given U.S. consumption has been one of few remaining bright
spots in the global economy, the data fanned worries the
Sino-U.S. trade war would tip the world into recession.
"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.
TRADE WAR
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.
In the currency market, the dollar index =USD was last at
98.075, bouncing off its lowest since Aug. 27 touched on
Wednesday.
Against the yen, it was a flat at 108.72 JPY= after
peaking at 108.90 on Tuesday.
The euro stood at $1.1071 EUR= , near a one-month high of
$1.1085 hit in U.S. trade on Wednesday.
In commodities, oil prices slipped after industry data
showed a larger-than-expected build-up in U.S. crude stocks,
adding to concerns that demand for oil around the world may
weaken amid further signs of a global economic slowdown.
Brent crude LCOc1 futures fell 0.89% to $58.89 a barrel
while U.S. West Texas Intermediate (WTI) crude CLc1 lost 1.03%
to $52.81.