* MSCI Asia-Pacific index slips 0.2 pct
* Flows support rotation theme into Asia from LatAm
* China stocks extend gains as market normalizes
* Dollar rebounds after upbeat U.S. home sales data
By Saikat Chatterjee
HONG KONG, July 23 (Reuters) - Asian shares edged lower on Thursday as mixed regional data and overnight declines on Wall Street prompted investors to take profits, while the dollar held steady as expectations for a rise in U.S. interest rates were strengthened by buoyant home sales.
Financial spreadbetters expected Britain's FTSE 100 to open around 0.4 percent higher, Germany's DAX 0.3 percent higher, and France's CAC 40 to open around 0.4 percent.
South Korea's economy recorded its weakest expansion in six years in the second quarter, battered by a deadly virus outbreak and poor exports, while Japan reported strengthening export growth in June but concern remained over how shipments to China might be affected by its slowing economy.
The MSCI's broadest index of Asia-Pacific shares outside Japan slipped 0.2 percent but was holding well above a near 1-1/2 year low hit on July 8.
Tokyo's Nikkei rose 0.4 percent, helped by a weaker yen, while Australian shares were off 0.2 percent.
Capital flow trends suggest money managers are slowly turning more bullish towards the region's growth prospects within the broader emerging market bloc.
Equity and bond inflows turned positive for the week of July 15 in Asia while Latin America posted yet another week of redemptions from both these asset classes, according to EPFR data compiled by BNP Paribas.
"Asia remains one of the bright spots in the global economy with China and India remaining committed to a broader economic reforms agenda," said Kenneth Akintewe, a portfolio manager at Aberdeen Asset Management, which has $490.8 billion in assets under management globally.
China stocks extended their recovery on Thursday from last month's collapse, with the Shanghai Composite index set to rise for a sixth consecutive session, led by gains in blue chips. The Hong Kong market also advanced.
Stock markets were subdued by disappointing earnings from global tech giants, led by Apple whose shares plunged overnight, a day after the iPhone maker gave a fourth quarter revenue forecast that was below market expectations.
Microsoft also slumped after reporting its biggest quarterly loss.
In currencies, the dollar nudged up 0.1 percent to 124.05 yen after rebounding overnight from a low of 123.27 thanks to a rise in U.S. home sales to a 8-1/2 year peak.
The euro was little changed at $1.09360 after coming off an overnight peak of $1.0966.