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Hong Kong - Asian stocks were lacklustre on Tuesday after an HSBC report showed the performance of China's service sector fell to a record low in July, and despite a positive lead from Wall Street.
The HSBC China services purchasing managers' index in July slipped to 50.0, the dividing line between expansion and contraction, from 53.1 in June, according to Dow Jones Newswires.
"The weakness in the headline number likely reflects the impact of the ongoing property slowdown in many cities, as property-related activity, such as agencies and residential services, see less business," Qu Hongbin, HSBC Chief Economist for China, said in a statement.
Tokyo fell 0.24% by the break, Sydney dipped 0.33%, and Seoul dropped 0.70%, while Hong Kong and Shanghai were flat in morning trade.
Traders also said an overnight recovery in US stocks failed to follow through in Asia.
In the United States, the Dow Jones Industrial Average rose 0.46%, the S&P 500 rose 0.72%, and the Nasdaq Composite Index advanced 0.72% by the close on Monday.
Peter Cardillo, chief market economist at Rockwell Global Capital, said traders were engaging in "bargain hunting" after sharp losses at the end of July.
Last week, the Dow shed its gains for the year in its worst week since January, and the S&P 500 recorded its biggest weekly decline since mid-2012.
In currency markets, the euro stayed weak against the dollar in Asia on Tuesday as investors awaited eurozone data and a monthly policy meeting of the European Central Bank.
The euro bought $1.3416 in Tokyo midday trade against $1.3421 in New York late Monday, while buying ¥137.63 against ¥137.64 in US trade.
The dollar was at ¥102.58 against ¥102.56 in US trade.
On oil markets, the US benchmark West Texas Intermediate (WTI) for September delivery rose 14 cents to $98.43, while Brent crude for September gained 19c to $105.60 in mid-morning trade.
Gold fetched $1 288.38 an ounce by 03:00 GMT compared with $1 292.80 late on Monday.
