European stocks were set to track losses in Asia and on Wall Street overnight, with quarterly figures from mobile phone giant Nokia dominating the day's earnings.

Some semiconductor stocks fell after Novellus Systems Inc. said business was declining sharply in the current quarter. Its shares sank 6 percent in after-hours trade.

U.S. light crude rose 22 cents to $53.86 a barrel, just 1 percent off Tuesday's record peak of $54.45. The dollar eased ahead of U.S. trade data at 12:30 p.m. GMT, while three-month LME copper was trading steady in Asia just below $2,815 a ton after falling about 10 percent on Wednesday. Gold rebounded, climbing to $415.5 from $413.00 in New York, but metals markets were braced for more selling pressure, commodities analysts said. Tokyo's Nikkei stock average ended down 1.4 percent at 11,034.29, led by a 4.7 percent fall in steel maker JFE Holdings and a 6 percent drop in Sumitomo Metal Mining Co. Ltd.

"Fears that Chinese economic growth is going to slow are prompting big drops in sectors that have been benefiting from China-led demand such as steel," said Masaru Ueda, head of investment strategy at Marusan Securities.

"But China's economy is doing fine and this is just a temporary sell-off," he said.

An MSCI index of shares elsewhere in the Asia-Pacific had fallen 0.8 percent by 0615 GMT, weighed down by a 3.2 percent fall in its and materials sector.

Most Asian stock indexes fell, with shares dropping 2.2 percent in Taiwan, and around 1 percent in Hong Kong South Korea and Singapore.

METALS SLIDE

Australian shares fell from a record high hit Wednesday, as losses in resource firms offset gains in banks and media companies. Miners BHP Billiton and Rio Tinto fell 4.3 and 3.2 percent respectively, leading Australian shares 0.4 percent lower.

Steel maker POSCO Co. Ltd. fell 3.7 percent, while Japan's Nippon Steel Corp. dropped 4.5 percent. China Steel plunged 6.2 percent in Taiwan and Jiangxi Copper Co. Ltd. tumbled 8 percent in Hong Kong.

The falls came after commodities prices tumbled on Wednesday, with copper's slide leading declines in aluminum, gold, silver, platinum and palladium.

China's metal futures fell by their daily limits on Thursday, driven lower by the sharp falls on the LME. LME copper was trading around $2,815 a ton in Asia after hitting $3,177.50 Monday -- its highest since January 1989.

"Copper markets have seen crazy trade over past weeks, with prices soaring to multi-year highs. A strong correction this week is only to be expected," said Zhou Feng, a senior analyst at major trading house China Minmetals Nonferrous Metals.

"But strong market fundamentals have not changed."

Memory-chip maker Samsung Electronics Corp. fell 1.1 percent ahead of its earnings report Friday, while Advantest Corp., the world's largest maker of chip testing equipment, slid 1.6 percent.

OIL MARCHES HIGHER

Oil resumed its march toward record highs, supported by worries about tight supplies during the northern hemisphere winter when demand is at its peak and fueling fear over the effect of high energy costs on global economic growth.

In the United States, weekly distillate stockpile data, due later in the day, is expected to show a fall of 1.1 million barrels, a Reuters poll of analysts showed. U.S. heating oil inventories are already at a 6 percent deficit versus last year.

Winter fuel is also in short supply elsewhere around the globe, with European distillate inventories roughly 3.4 percent below last year and kerosene supplies in Japan down 20 percent from 2003.

The dollar bought 109.59 yen, versus 109.74 in late U.S. trade. The euro stood around $1.2355, against $1.2348. That was sharply higher than the three-week low of $1.2224 hit on Wednesday.

Japanese government bond (JGB) prices rose, with the yield on the benchmark 10-year JGB down 2.0 basis points at 1.465 percent.