TOKYO (Reuters) - Asia markets slipped on Wednesday as relief over Greece's latest bailout turned to doubts that the debt-stricken country can keep to its austerity programme and concern about rising oil prices.
MSCI's broadest index of Asia Pacific shares outside Japan eased 0.3 percent, having climbed 14 percent so far this year to rank among top asset performers.
The euro edged back from two-week highs reached after the Greek deal was announced on Tuesday.
"If you look at how much the equity market had already moved year to date, you'd expect the market to take a bit of a breather," said Markus Rosgen, head of Asia strategy at Citigroup in Hong Kong. "Equity markets had run up quite quickly and strongly. A break is something that wouldn't surprise me."
"Investors are undecided whether they should buy more or wait for a pullback," Rosgen said, adding markets were a bit overbought technically but valuations remained attractive.
Hong Kong shares fell 0.6 percent and Shanghai shares dropped 0.2 percent, with losses increasing slightly after HSBC released its China flash PMI.
The PMI showed the factory sector shrinking for the fourth month in a row.
Japan's Nikkei average inched up 0.2 percent to 9,477.6, but struggled for further upside momentum as investors used 9,500 as a trigger point to take profits on a 7.5 percent rise so far in 2012.
"Market sentiment continues to be positive, supported by U.S. data and the agreement in Greece, but we are at a level that requires some adjustment," said Yumi Nishimura, senior technical analyst at Daiwa Securities.
The euro was changing hands at $1.3220 and struggling to make headway after slipping from near two-week highs of $1.3293 on Tuesday after the Greek bailout deal was clinched.
The 130 billion-euro bailout averted an imminent Greek default, but kept intact the long-term risk of a messy default and regional contagion given deep-rooted mistrust over Athens' commitment to harsh reforms.
"Even assuming the new Greek programme proceeds as planned, the Greek crisis is far from over," HSBC said in a report, noting the economy was in its fifth year of recession.
"Even the revised debt sustainability analysis looks optimistic and remember that Greece will still be subject to quarterly reviews, which could well mean that we are back to worrying about whether Greece will get the next tranche of funds by the summer," it said.
OIL NEW CONCERN
European stocks fell on Tuesday as investors cashed in on recent rises, while U.S. stocks gave up early gains on concerns surging oil prices would hurt the economy and doubts about Greece's future.
Oil fell in Asia after scaling nine-month highs on Tuesday on relief at Greece's bailout news and moves by top Asian consumers -- China, India and Japan -- to cut crude purchases from Iran.
U.S. crude futures for April dropped 44 cents to $105.81 a barrel. The March contract, which expired on Tuesday, settled at $105.84 per barrel, the highest settlement for the front-month contract in more than nine months.
Brent crude for April delivery fell 0.4 percent to $121.19 after settling on Tuesday at a nine-month high.
Australian shares fell partly due to concerns that rising oil prices would hurt global growth and so undermine demand for the country's commodities.
However, Citigroup's Rosgen said the rise in oil prices was partly indicative of a stronger-than-expected world economy and they do not pose a risk to growth at current levels.
While central bank liquidity measures are partly blamed for fuelling a rise in commodity and energy prices, they had supported lower-rated euro zone sovereign debt markets, keeping bond yields of struggling Italy and Spain on a downtrend.
In credit markets, a pause in risk taking pushed spreads on the iTraxx Asia ex-Japan investment-grade index wider by 3 basis points on Wednesday.
(Additional reporting by Mari Saito in Tokyo; Editing by Neil Fullick)
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