HONG KONG (Nikkei Markets) -- The Nikkei gauge for Asian shares outside of Japan edged lower on Tuesday following a pullback in Chinese companies despite a better-than-expected manufacturing data.
The Nikkei Asia300 index fell 0.3% to 1,390.66 in thin trading to trim its annual advance. Monetary accommodation by central banks around the world, combined with improved outlook on the U.S.-China trade relations, has helped the index post a 15% gain this year.
The gauge's losses on Tuesday came after a weak session on Wall Street overnight in which the S&P 500 Index fell by the most in three weeks to whittle down its near 30% annual advance.
An index of Chinese companies listed in Hong Kong declined 0.5% despite data indicating that manufacturing activity in Asia's largest economy remained in expansion. The official NBS manufacturing Purchasing Managers' Index posted a reading of 50.2 for December, unchanged from the previous month and better than the 50.1 expected by economists polled by Reuters. The official non-manufacturing PMI came in at 53.5 in December versus 54.4 in November.
"The NBS PMI surveys suggest activity growth in the manufacturing sector remained healthy in December, helped by stronger external demand," Goldman Sachs said in a note. "The reflation trend in the manufacturing sector perhaps added to the headline manufacturing PMI reading."
Investors will receive more information on how Chinese manufacturing fared in December on Thursday. The Caixin China manufacturing PMI is expected to post a 51.7 reading. The Caixin survey concentrates on small and medium-sized firms compared with the official one which focuses on large companies.
In movers on the A300 on Tuesday, Chinese mobile gaming and social media major Tencent Holdings slipped 1.98%, among the biggest contributors to the index's losses.
Malaysia's benchmark equity index, the FTSE Bursa Malaysia KLCI Index, fell by the most in 14 months on Tuesday. Electric utility firm Tenaga Nasional dropped 2.1% and lender Public Bank dropped 2.7%.
-- Nimesh Vora