By Sarah Turner, MarketWatch
SYDNEY (MarketWatch) -- Asia's major stock markets lost ground
Tuesday after some weak global manufacturing data contrasted with
earlier numbers showing improvement at Chinese factories.
Japan's Nikkei Stock Average fell 0.4%, South Korea's Kospi lost
0.5%, and Australia's S&P/ASX 200 index traded down 0.2%.
In China, Hong Kong's Hang Seng Index traded fractionally lower,
while the Shanghai Composite Index lost another 0.2% to hit a fresh
four-year low.
The weakness in Asia followed on from a lower finish Monday on
Wall Street, where stocks were pressured after a measure of U.S.
factory activity unexpectedly contracted in November and as
uncertainty lingered over the fiscal cliff of automatic tax hikes
and spending cuts.
Euro-zone manufacturing activity also contracted in November,
falling for a 16th successive month, with the headline index at
46.2, well below the 50 level that separates expansion from
contraction.
The "surprisingly weak U.S. data dampened sentiment overnight,
reversing an earlier 'risk-on' mood due to solid Chinese data,"
said Crédit Agricole strategist Kintai Cheung.
Chinese manufacturing data -- competing versions of which were
released Saturday and Monday -- presented a relatively upbeat view
of China's economy.
UBS equity strategist David Cassidy said Tuesday that an
expected improvement in the Chinese economy formed one of the key
reasons for the broker's "pretty bullish" view on Asian equities
for 2013.
"As long as we can eke out economic growth next year in China
and the U.S., I think that the line of least resistance is up,"
said Cassidy.
Asia stock valuations are reflecting a lot of pessimism, and "we
think that Asia is a beneficiary of loose global monetary policy,"
Cassidy said.
More immediately, the weaker European and U.S. numbers saw Asian
equities move broadly lower Tuesday, with exporters slipping in
Hong Kong as Esprit Holdings Ltd. (ESHDF) lost 1% and Belle
International Holdings Ltd. (BELLY) declined 1.6%.
Luggage firm Samsonite International SA (SMSOF) tumbled 3.6%,
while airline Cathay Pacific Airways Ltd. (CPCAY) slipped 0.8%,
amid a CNBC report that flight attendants had set a 3 pm local-time
deadline for management to respond to salary demands or face a
possible labor action.
Air China Ltd. (AIRYY) declined 0.9% in Shanghai, while China
Eastern Airlines Corp. (CEA) slipped 0.3%.
Mining stocks were among the worst performers in Australia as
gold extractor Newcrest Mining Ltd. (NCMGF) and copper miner
PanAust Ltd. each declined 1.8%.
Retailers saw some strength, however, with department-store
operator Myer Holdings Ltd. up 4.2% ahead of a decision on
Australian interest rates due later in the session.
Short-term interest-rate markets were pricing in a more-than-90%
chance of a quarter-point cut to the benchmark rate.
In Japan, tech exporters saw some weakness, with Hitachi Ltd.
(HIT) lower by 1.3%, and camera-maker Nikon Corp. (NINOF) falling
2.3%, while Advantest Corp. (ATE) tumbled 3.9% after Crédit Suisse
cut its rating on the firm to underperform from outperform.
Sharp Corp. (SHCAF) rose 1.7%, however, after a Nikkei news
report that it plans to join Qualcomm Inc. (QCOM) to develop an
energy-efficient LCD smartphone panel.
South Korea trading saw heavyweight tech major Samsung
Electronics Co. (SSNLF) lose 0.4%, while auto maker Hyundai Motor
Co. (HYMTF),edged down 0.2% despite posting November gains in both
its U.S. and Korean sales.
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