Regional markets commenced trading with weak note, on tracking negative lead from the U.S., where the Dow and S&P 500 closed lower following the release of weaker-than-expected service sector data. The Institute of Supply Management said its non-manufacturing purchasing managers' index fell to 53.0 in December from 53.9 in November. Analysts were expecting the index to increase to 54.5.
Turnover across the region relatively light on caution ahead of this week's key risk events. The minutes of Fed's recent policy meeting due on Wednesday, policy decisions from the European Central Bank and Bank of England due on Thursday, and finally, U.S. non-farm payrolls report for December due on Friday.
Among Asian bourses, shares of the Japan's share market slipped, with the benchmark index slightly extending losses from the previous session as investors continued taking profit off the table due to appreciation of Japan's currency against the U.S. dollar. The Nikkei Stock Average slipped 0.6% to 15814.37, following Monday's slide of 2.4%. The benchmark surged 57% YoY in 2013.
Risk aversion selloff triggered as the dollar slipped to 104.23 yen on Tuesday from 104.33 yen in New York on Monday, and well off the 105.41 yen it hit at the start of last week, which was a five-year high.
Export related shares were biggest decliner in the Tokyo market due to hardening of Yen against the US dollar, which eats overseas earnings when repatriated home. Canon Inc lost 0.8% to 3275 yen and Advantest Corp.shed 1.2% to 1238 yen. Auto makers also lost ground, with Toyota Motor Corp down 0.5% to 6270 yen, Honda Motor Co. dropped 0.9% to 4235 yen and Nissan Motor Co. fell 0.3% to 895 yen.
Industrial issues were under pressure as shares of Komatsu lost 1.8% to 2052 yen. Mitsubishi Heavy Industries shares, however, picked up 0.2% to 655 yen after the company received a second order to provide train cars to be used in Macau's new mass-transit system.
In Australia, Australian stock market closed weaker for third session in row, with weakness in the mining sector overshadowing gains elsewhere. The benchmark S&P/ASX 200 Index was down by 7.90 points from prior day to finish at 5317. The benchmark fell 0.47% in the previous session and 0.33% prior to that.
Metals and mining shares retreated with BHP Billiton falling 0.9% to A$37.21 and Rio Tinto loosing 2.6% to A$66. Fortescue Metals lost 4.7% to A$5.44. Volatile gold-miner shares saw a larger pullback, as Comex gold futures ended with a slight loss Monday. Newcrest Mining shed 0.5% to A$8.58, Kingsgate Consolidated 2.8% to A$1.055 and Perseus Mining 1.6% to A$0.305.
The big four banks and financials were mixed. Commonwealth Bank was up 0.15% to $77.72, while National Australia Bank was down 0.1% to A$34.50, Australia & New Zealand Banking Group 0.4% to A$31.86 and Westpac Banking Corp 0.1% to A$32.08. Among insurers, QBE Insurance Group rose 1.2% to A$11.87 and Insurance Australia Group added 0.5% to A$5.77.
Macquarie Group slipped 1.43% to A$54.35 as the Australian Financial Review said the investment bank was leading a consortium in talks to buy some 900 Australian gas stations and a refinery from Royal Dutch Shell.
In China, shares in China's stock market closed higher for the first time in four consecutive sessions after fluctuating between gains and losses on the back of gains in companies linked to Shanghai's free-trade zone after the government eased rules on foreign investment. The benchmark Shanghai Composite index rose 1.61 points to finish at 2047.32, while the CSI 300 Index shed 0.64 point to close at 2238.
Despite positive finishing, market sentiments remain weak after China's cabinet drafted a framework to tighten the oversight of rapidly increasing shadow-banking industry. The move suggests that Beijing is looking to control rapid buildup of debt in recent years
The State Council said yesterday that it had temporarily suspended laws to allow international shipping joint ventures and foreign-owned international shipping management firms in the zone. It also temporarily halted a ban on sales of game consoles by foreign-invested companies and delegated the task of drafting new rules to departments overseeing cultural matters. Consoles such as Microsoft's Xbox 360 and Sony Corp.'s PlayStation were banned by China in June 2000.
Shares of Shanghai's free-trade zone rallied after the cabinet said it had temporarily suspended laws to allow international shipping joint ventures in the zone. Shanghai International Port surged 7.9% to 5.17 yuan. Shanghai Waigaoqiao gained 2.5% to 30.72 yuan. BesTV New Media, which formed a game console venture with Microsoft Corp. in the zone, surged 8.4% to 40.28 yuan.
In Hong Kong, shares in HK market advanced in volatile yet narrow trade, as investors chased for value buying following slump in previous two sessions. The benchmark Hang Seng Index provisionally ended 28.63 points higher at 22712.78, while Hang Seng China Enterprises Index sank 54.43 points to 10236.12.
Among the HK 50 blue chips, 33 fell and 15 rose, with 2 stocks remaining steady. China Overseas Land & Investment declined 2.6% to HK$20.35, while Li & Fung rose 9.6% to HK$10.78, making themselves the biggest blue-chip loser and gainer.
In India, key benchmark indices edged lower in choppy trade, with market sentiment hit adversely by data showing that foreign funds were net sellers of Indian stocks on Monday, 6 January 2014. The S&P BSE Sensex lost 94.06 points or 0.45% to settle at 20,693.24, its lowest closing level since 17 December 2013.
Foreign institutional investors (FIIs) sold shares worth a net Rs 267.20 crore into the secondary equity markets on Monday, 6 January 2014, as per data from Securities & Exchange Board of India (Sebi).
IT stocks edged lower after weaker-than-expected US services-sector data. Index heavyweight and cigarette major ITC edged higher in volatile trade. Another index heavyweight Reliance Industries extended intraday fall in late trade. ICICI Bank edged higher in volatile trade. Metal stocks edged lower. Realty stocks also dropped.
Elsewhere in the region, New Zealand's NZX50 index shed 0.1%. Indonesia's Jakarta Composite index lost 0.6%. South Korea's KOSPI jumped 0.3%. Taiwan's Taiex index added 0.1%. Malaysia's KLSE Composite dropped 0.2%. Singapore's Straits Times index fell 0.1%.
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