ASIA MARKETS: Asia Stocks Edge Lower, As Data Disappoint

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. (>> Esprit Holdings Limited) lost 1% and Belle International Holdings Ltd. (>> BELLE INT ADR) declined 1.6%.

Luggage firm Samsonite International SA (>> Samsonite International S.A.) tumbled 3.6%, while airline Cathay Pacific Airways Ltd. (>> Cathay Pacific Airways Limited) 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. (>> Air China Ltd.) declined 0.9% in Shanghai, while China Eastern Airlines Corp. (>> China Eastern Airlines Corporation Ltd.) slipped 0.3%.

Mining stocks were among the worst performers in Australia as gold extractor Newcrest Mining Ltd. (>> Newcrest Mining Limited) 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. (>> Hitachi, Ltd.) lower by 1.3%, and camera-maker Nikon Corp. (>> NIKON CORPORATION) falling 2.3%, while Advantest Corp. (>> Advantest Corp) tumbled 3.9% after Crédit Suisse cut its rating on the firm to underperform from outperform.

Sharp Corp. (>> Sharp Corporation) rose 1.7%, however, after a Nikkei news report that it plans to join Qualcomm Inc. (>> QUALCOMM, Inc.) to develop an energy-efficient LCD smartphone panel.

South Korea trading saw heavyweight tech major Samsung Electronics Co. (>> Samsung Electronics Co., Ltd.) lose 0.4%, while auto maker Hyundai Motor Co. (>> HYUN MTR GDR REG S),edged down 0.2% despite posting November gains in both its U.S. and Korean sales.

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