Asian shares mostly retreated on Tuesday, tracking a sell-off in offshore equity markets, as a fresh batch of Chinese data added to the uncertainty from a looming interest-rate hike in the U.S.
China's consumer price index (CPI) for October rose 1.3 percent from a year earlier , data from the National Bureau of Statistics (NBS) showed, cooling from 1.6 percent in September and slightly below expectations of a 1.5 percent rise. Meanwhile, the producer price index (PPI) fell 5.9 percent in October, chalking up its 44th straight month of declines after dropping 5.9 percent in the previous month.
Analysts noted that the latest inflation report signal a less-than-stellar picture in the world's second largest economy and the need for additional policy easing measures.
"Much of the hope for China's economic transition rests on continuing strong consumption and services sector growth [thus] it was most concerning to see a drop in consumer goods and food inflation. The lesser weighted components for recreation, education and cultural services also saw noticeable weakening," IG's market strategist Angus Nicholson wrote in a note issued mid-Tuesday.
"This is not good news for a government that targets a floor to growth of 6.5 percent and doubling income by 2020. The People's Bank of China (PBOC), thus, will be under pressure to ease monetary conditions further. We expect the central bank to slash the reserve requirement ratio by another 50 basis points to 17 percent," said Alicia Garcia Herrero, Natixis's chief economist for Asia Pacific.
Overnight, major U.S. averages posted their biggest decline in six weeks , down 1 percent each, as investors pondered a possible U.S. interest-rate hike in December.
According to the CME Group, the probability of a December lift-off rose from about 58 percent to about 70 percent, after the October nonfarm payrolls report — released Friday — showed the U.S. economy added 271,000 jobs.
China stocks mixed
China's benchmark Shanghai Composite (Shanghai Stock Exchange: .SSEC) index closed down 0.1 percent, after surrendering early gains in the afternoon trading session as property developers and banks came under pressure.
Poly Real Estate (Shanghai Stock Exchange: 48-SZ) and China Merchants Property (: Z24-CN) slid 1.9 and 2.5 percent respectively, while Industrial and Commercial Bank of China (Shanghai Stock Exchange: 1398-SZ) led declines in the sector, down 1.5 percent.
Fortunately, Chinese brokerage houses helped to offset some losses by extending a rally from last week. Industrial Securities jumped by the daily maximum allowable of 10 percent, while Founder Securities (Shanghai Stock Exchange: 1901-SZ), Citic Securities (Shanghai Stock Exchange: 30-SZ) and Everbright Securities closed up between 1.4 and 5 percent.
Among other indices, the blue-chip CSI300 Index inched down 0.2 percent and the smaller Shenzhen Composite notched up 0.8 percent.
In Hong Kong, the Hang Seng (Hong Kong Stock Exchange: .HSI) index took cues from its regional peers, falling 1.3 percent to a one-week low.
Internet behemoth Tencent (Hong Kong Stock Exchange: 700-HK) was in focus ahead of its third-quarter earnings results due later in the day. Shares of the Shenzhen-based social networks and online games company eased 1.1 percent.
Nikkei adds 0.2%
Japan's benchmark Nikkei 225 (CBOE: .NKXQ) index turned positive in the final hour of trading, eking out modest gains to settle at a two-and-a-half-month high. The index also chalked up a four-session winning streak.
Earlier in the day, the Tokyo bourse fell to an intra-day low of 19,457 as a weak handover from Wall Street and disappointing Chinese data soured sentiment.
Index heavyweight Fast Retailing (Tokyo Stock Exchange: 9983.T-JP) rose 1.9 percent, contributing significant upward support for the bourse.
A host of upbeat earnings reports lifted specific stocks; Japan Display (Tokyo Stock Exchange: 6740.T-JP) surged nearly 8 percent after swinging to a profit for the April-September period while Screen Holdings closed up 6.1 percent, thanks to a 60 percent on-year jump in its April-September operating profit.
Yokogawa Bridge Holdings leaped nearly 12 percent to a four-and-a-half-month high after raising its guidance.
Among decliners, heavyweight SoftBank (Tokyo Stock Exchange: 9984.T-JP) dropped 0.8 percent and airbag maker Takata (Tokyo Stock Exchange: 7312.T-JP) extended its losing streak, down 1.9 percent. Nippon Soda (Tokyo Stock Exchange: 4041.T-JP) tumbled 6.6 percent, adding to Monday's 10.2 percent decline, after the chemical manufacturer cut its operating profit forecast for the year ending December 2015.
On the domestic data front, Japan's current account surplus stood at 1.47 trillion yen (Exchange: JPY=) ($11.95 billion) in September, figures released by the Ministry of Finance prior to the market open showed, logging a current account surplus for the 15th straight month .
ASX slips 0.4%
Australia's S&P ASX 200 (ASX: .AXJO) index was driven lower by struggling financials, but managed to come off the day's lows at the close. Earlier in the session, the Sydney bourse fell to 5,047 points — its lowest since October 5.
Among the four major lenders, Westpac (ASX: WBC-AU) and Commonwealth Bank of Australia (ASX: CBA-AU) closed down more than 1 percent each. Bendigo and Adelaide Bank (ASX: BEN-AU), which had its annual meeting on Tuesday, gained 0.5 percent.
Meanwhile, investment Bank Macquarie Group (ASX: MQG-AU) narrowed losses to 0.1 percent.
The resources sector enjoyed a reprieve after taking a battering in the previous trading sessions. Kingsgate Consolidated and Alacer Gold (Toronto Stock Exchange: ASR-CA) surged 5.2 and 3 percent respectively, as the price of gold edged up in Tuesday's Asian trade. Market bellwether BHP Billiton (London Stock Exchange: BLT-GB) recouped early losses to close up 0.8 percent.
Meanwhile, port and rail giant Asciano (ASX: AIO-AU) rallied 3 percent after saying on Tuesday it has received a takeover proposal from a consortium led by Qube Holdings (ASX: QUB-AU), challenging a rival offer from Canada's Brookfield Asset Management (Toronto Stock Exchange: BAM.A-CA). Shares of Qube Holdings tanked 3.5 percent.
Kospi falls 1.4%
South Korea's Kospi (Korea Stock Exchange: .KS11) index was one of the biggest laggards in the region on Tuesday, settling at its lowest level since October 6.
The index's top two weighted stocks Samsung Electronics (Korea Stock Exchange: 593-KR) and Hyundai Motor (Korea Stock Exchange: 538-KR) slumped more than 1 percent each, while blue-chip utility firm Kepco plummeted 4.2 percent.
Bucking the downtrend, Lotte Shopping (Korea Stock Exchange: 2353-KR) and Shinsegae advanced 0.2 and 1.9 percent respectively, after preliminary government data released on Tuesday showed sales at South Korea's top department and discount stores rising 17.4 percent on-year for October. But Hyundai Department Store closed down 3 percent.
India shares lower
Share markets in India remain on the back foot, amid concerns that an election defeat for Prime Minister Narendra Modi in the closely-watched Bihar state elections will crimp his ability to push through reforms.
The S&P BSE Sensex (Hong Kong Stock Exchange: 2836-HK) index and the 50-share Nifty index retreated 0.7 percent each, a day after touching their lowest close since September 29.
On the other hand, InterGlobe Aviation leaped 15 percent to 879.50 rupees (Exchange: INR=) in its market debut on Tuesday, above its initial public offering price of 765 rupees. InterGlobe, the operator of top Indian airline IndiGo, raised 30.1 billion rupees ($453.52 million) in the IPO, which was subscribed over six times driven by strong demand from foreign institutional investors, Reuters reported.
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