HONG KONG (MarketWatch) — Most of Asia’s major stock markets ended flat to lower Tuesday, weighed down by weak global manufacturing data, although China’s stocks gained back their sparkle to end higher after setting fresh lows early in the session.
Japan’s Nikkei Stock Average /zigman2/quotes/210597971/delayed JP:NIK -3.34% and South Korea’s Kospi /zigman2/quotes/210598069/delayed KR:180721 +1.18% both lost 0.3%, while Australia’s S&P/ASX 200 index /zigman2/quotes/210598100/delayed AU:XJO -1.60% traded down 0.6% after a quarter-point interest-rate cut by the central bank.
Hong Kong’s Hang Seng Index /zigman2/quotes/210598030/delayed HK:HSI +0.27% squeaked out a 0.2% gain, but the Shanghai Composite Index /zigman2/quotes/206600939/delayed CN:000001 -1.25% reversed from four-year intraday low to end 0.8% up.
The Shenzhen Composite also staged a comeback after trading deep in the red, to end up 1.3%.
The Asia Dow was off 0.3%.
RBA cuts rates
Asian markets had started off sharply weaker, but things turned more favorable after the Reserve Bank of Australia announced a quarter-point easing, bringing the base rate down to 3%, where it stood at the peak of the global financial crisis.
RBA Gov. Glenn Stevens said in a statement accompanying Tuesday’s decision that the central bank’s rate-setting board judged it was appropriate to ease rates further to “help to foster sustainable growth in demand and inflation outcomes consistent with the [RBA’s] target over time.” Read: Australia cuts rates back to crisis-era low
Société Générale economist Klaus Baader in Hong Kong said Australia was facing complex issues in dealing with a “substantial slowdown” as its mining-investment boom draws to a close.
“The future is much less certain, and what’s less clear is whether other parts of the economy, namely residential investment, can fill the gap in demand that will be left by the contraction in mining and investment,” Baader said.
Overall, Baader said he was upbeat on Australia, owing to its growing population, though he warned many commodity-related projects appear ill-timed. He named liquefied-natural-gas investment as among those likely to suffer from a resurgence in U.S. energy production.
Workers deported from Singapore
Singapore deports 29 mainland Chinese bus drivers for protesting against their living conditions and wages.
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.
Wall Street and reports
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.