HONG KONG – Asian markets ended lower on Tuesday, with Japan breaking an eight-day winning streak, while liquidity concerns weighed on stocks in Shanghai.
Trading started on a good note early Tuesday, with a positive lead from Wall Street, which rose for its seventh consecutive session on Monday, reaching a record.
Domestic headwinds in individual markets, however, led the region into negative territory as the session progressed.
The largest drop was in mainland China, where shares dropped for a fourth session. Residual concern about the recovery in Asia’s largest economy persisted. Recent economic data disappointed investors, with a spike in inflation a particular concern. In addition, sentiment has been dented the central government’s renewed measures to control the property market.
The Shanghai Composite fell 1% to 2286.60 after the central bank signaled that it planned to drain more cash from the financial system.
The People’s Bank of China “clearly is mopping up liquidity, and this will likely lead to March’s manufacturing data and other economic activity coming in weaker compared to February,” said Zhang Gang, analyst at Southwest Securities.
Weakness in Chinese companies helped the Hang Seng Index in Hong Kong fall 0.9% to 22890.60.
MTR Corp. (MTRJY) fell 2.3% after the Hong Kong rail operator’s 2012 net profit fell by 13%, as fewer sales offset an increase in rail and retail income.
Also in Hong Kong, China’s largest shipping company, China Cosco Holdings, (CICOY) fell 5.3% after the company said that it planned to sell its logistics unit to its state-owned parent.
Australian stocks also fell afoul of disheartening domestic news. The ASX/S&P 200 fell 0.6% to 5117.90 after local business conditions weakened slightly in February, according to a survey by National Australia Bank. The data helped pull the market into negative territory after it traded flat early in the session.
Japanese stocks ended lower, unaffected by further declines in the yen. The Nikkei closed 0.3% lower at 12314.81, while the dollar (USDJPY) strengthened to 96.38 yen from 96.28 late Monday in New York.
Shares that have performed in recent sessions pulled back on Tuesday, though technology exporters welcomed the weaker yen: Fast Retailing (FRCOY) fell 2.3% while Canon Inc. (CAJ) climbed 1.3%.
Also in Tokyo, Japan Tobacco (JAPAF) fell 0.7% after the Japanese government said that it would sell part of its stake in the company to the public for 747 billion yen.
Nippon Steel & Sumitomo Metal jumped 4.4% following a Nikkei report that said the company is making the final arrangements to stop operations of a blast furnace at a major steelwork in order to reduce excess capacity.
South Korea’s Kospi Composite fell 0.5% to 1993.34 and Singapore’s Straits Times Index was up 0.31%.
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ASIA MARKETS: Asian Shares Fall; Liquidity Concerns Hit Shanghai – Fox Business}