HONG KONG (Nikkei Markets) -- Asian shares retreated on Wednesday following a two-day rally, with investors eyeing upcoming Chinese economic data and developments in Sino-American trade relations.
The Nikkei Asia300 Index of companies outside Japan declined 0.3% to 1,307.45 following a 2% advance in the previous two sessions.
The losses came a day before China releases a slew of economic data, including retail sales, industrial output and urban investment. Investors are likely to watch the numbers closely amid signs of late that Asia's largest economy is enduring an economic slowdown. Recent data has showed a slowdown in China's factory activity and a wider-than-expected drop in exports and imports.
The data comes amid a monthslong trade dispute with U.S., in which both nations have imposed tariffs on shipments from each other. While there has been growing optimism in recent days that the nations will reach a deal, and President Donald Trump has said he will meet Chinese President Xi Jinping in the coming days for a "signing ceremony," doubts remain.
On Tuesday, U.S. trade representative Robert Lighthizer reportedly told the Senate Finance Committee that although both sides were working towards an agreement, major issues have yet to be resolved and that it was not possible to predict whether the talks will be successful.
"Right now, the only game in town is from a macroeconomic perspective - the outcome of the U.S.-China trade talks," Jeffrey Halley, senior market analyst at broker OANDA, wrote in a note. "Until the world's two largest economies conclude an agreement (or not), it will be difficult to gauge a clearer picture of the global economy. Right now, data suggests the world's industrialised economies (including China) are slowing."
Meanwhile, data released Tuesday showed that core retail U.S. inflation rose less-than-forecast, reinforcing expectations the Federal Reserve is unlikely to raise rates in coming months. The dollar index declined following the data, while the S&P 500 Index rose for a second day.
Heavyweights Samsung Electronics and Tencent Holdings were among the biggest contributors to losses for the Nikkei Asia300 Index on Wednesday, falling 1.8% and 0.7%, respectively. An index of Chinese companies listed in Hong Kong declined 0.5%, pulling back after a two-day, 2.8% rally. Chinese carmakers and lenders slipped, while insurers outperformed.
Ping An Insurance Group added 1.6% following a 20.6% jump in profit for 2018 and an 11% increase in revenue. Its shares rose 3.3% in Shanghai.
Cathay Pacific Airways advanced 2.3% after the Hong Kong carrier said that it swung to a net profit in 2018, benefiting from capacity growth and higher airfares. Net profit for the year ended Dec. 31 was HK$2.35 billion ($298.71 million), compared with a loss of HK$1.26 billion a year earlier.
Dual-listed Chinese telecommunications equipment maker ZTE fell 7.4% in Hong Kong and 7.8% in Shenzhen following news that the company's controlling shareholder plans to sell about a 3% stake.
Ayala Corp. declined 0.5% in Manila. The Philippine conglomerate on Wednesday reported a 5% increase in net income for 2018.
-- Nimesh Vora