Asian stocks remained under pressure as worries about a US economic slowdown persisted, even as a spate of Chinese data pointed to only a mild cooling in that economy.
China's annual economic growth eased to 10.3 per cent in the second quarter from 11.9 per cent in the first quarter, a touch weaker than expected, in response to credit curbs and the fading of fiscal stimulus.
Nevertheless, the data showed concerns about a steep slowdown in the world's third-largest economy were overblown. Inflation at the producer and consumer level also eased in June from May, reducing the need for further policy tightening.
With no nasty surprises from China, investor concern returned to the health of world's biggest economy after minutes of the Federal Reserve's June meeting showed officials were more concerned with the pace of the US recovery.
The MSCI index of stocks in Asia-Pacific outside Japan was down 0.4 per cent. The index had briefly turned higher after the Chinese data.
The Aussie dollar erased the half percentage point loss against the dollar it had made after an official Chinese paper reported the economy may slow more sharply than expected in the second half of this year.
"The data has attracted much attention but at the end of the day, they were not far from market expectations. They showed the Chinese economy is slowing down but that's what markets have been looking for," said Hideaki Inoue, manager of foreign exchange at Mitsubishi Trust and Banking Corp.
Shanghai stocks fell 0.36 per cent, reversing earlier gains, after Agricultural Bank of China disappointed with a lacklustre Shanghai debut. Its shares rose only marginally in the first few minutes of trading.
Banks repossessed a record number of US homes in the second quarter, though foreclosure filings eased slightly from earlier in the year, real estate data firm RealtyTrac said on Thursday. The root problems of job losses persist, making a sustained recovery in the housing market elusive.
Investors were waiting for corporate earnings results, including those from Google and JPMorgan Chase.
The Australian dollar stood at 88.02 US cents, down 0.4 per cent on the day but above the day's low 87.80 US cents hit after the Chinese newspaper report fanned fears of a sharp growth slowdown.
The Chinese Securities Journal reported prior to the government data that the economy may slow more sharply than expected in the second half of this year, which could cool demand for commodities.
The euro erased its losses to change hands at $US1.2746, not far from its two-month high of $US1.2778 hit on Wednesday.
The dollar was under pressure, holding near two-month lows against a basket of currencies.
Meanwhile, S&P futures erased earlier losses and were 0.17 per cent higher on the day at 1093.00, compared to around 1090 before the data.
Reuters