Asian shares were off session lows but still nursed losses amid a selloff in global equities on Thursday, as heightened concerns about world economic growth sent US Treasury yields down and Japanese stocks tumbling.

MSCI’s broadest index of Asia-Pacific shares outside Japan was down about 0.2 per cent.

Shanghai shares bucked the downtrend and added 0.6 per cent after Chinese bank lending data provided a regional bright spot. Lending beat expectations last month, a sign that demand for credit may be picking up, though a drop in China’s foreign exchange reserves in the third quarter suggested ominous speculative money outflows.

Japan’s Nikkei stock average tumbled 1.9 per cent and touched a more than four-month low, though it, too, pulled away from session lows as the dollar retook some ground lost to the yen.

“It’s clear that people are avoiding risks,” said Takatoshi Itoshima, chief portfolio manager at Commons Asset Management, adding that investors had started to doubt whether US economic recovery was strong enough to sustain the Japanese stock market.

S&P 500 e-mini futures edged up 0.3 per cent, which might portend a more stable day ahead on Wall Street as investors await more US data.

September industrial output and weekly jobless claims will be released later on Thursday and could paint a brighter picture than downbeat figures released in the previous session, which came after a recent spate of weak figures from China and Europe that raised fears about the health of the global economy.

US retail sales and producer prices both dropped last month, a worrisome economic signal that helped fuel a sell-off on Wall Street as it quashed expectations the Federal Reserve would hike US interest rates sooner rather than later.

The New York Fed’s Empire State general business conditions index also plunged to 6.17 in October from September’s 27.54, marking the weakest pace of manufacturing activity in New York state since April.

The S&P 500 briefly turned negative for the year on Wednesday, while European equities shed 3.2 per cent to mark their biggest one-day slide in almost four years.

The grim mood sparked a safe-haven rally in US Treasuries and pushed the yield on the benchmark 10-year note as low as 1.865 per cent, its deepest nadir since May 2013. It last stood at 2.090 per cent in Asian trade.

The rally carried over to the Japanese government bond market, where the yield on the 10-year JGB fell to a 1 1year low of 0.470 per cent.

Only a month ago, fed funds futures had suggested traders priced in almost a 50 per cent chance of a Fed rate increase as early as June 2015. But a jump in short-term US interest rates futures on Wednesday implied traders anticipate the US central bank would not move away from its near zero rate stance until the end of the first quarter in 2016.

The dollar’s index against a basket of six major currencies stood at 84.956, down about 0.2 per cent on the day and wallowing near levels last plumbed in September. Speculation of higher US interest rates had pushed the index to a four-year high of 86.746 earlier this month.

Against the yen, the dollar edged up on the day to 106.16 yen, after dropping to a more than one-month low around 105.20 on Wednesday, while the euro inched lower to $1.2816 after rising as high as $1.2885 overnight, its highest level since last month.

The dollar’s sharp fall overnight lent modest support to oil prices overnight, with US crude futures ending just 6 cents lower at $81.78. But the contract was down more than 1 per cent in Asian trade at $80.77, while Brent crude shed 1 per cent to $82.93.