Asian shares mostly lower, China PMI weighs

Hong Kong - Asian markets mostly slipped Tuesday, with Hong Kong hit for a second day as a pro-democracy protest showed no signs of abating and a gauge of Chinese manufacturing came in below forecast.

Traders took their cue from a negative Wall St. Japanese shares were hit by a surprise fall in factory output while the yen edged up against the dollar.

Hong Kong sank 1.28%, or 296.23 points, to 22 933, extending Monday's 1.90% losses.

Tokyo closed 0.84% lower, shedding 137.12 points to 16 174, while Seoul gave up 0.32%, or 6.51 points, to end at 2 020.

However, Sydney added 0.54%, or 28.58 points, to 5 293 and Shanghai climbed 0.26%, or 6.16 points, to 2 364 on the last day before a week-long holiday for China's National Day.

In Hong Kong a second night of mass protests passed off peacefully Monday, bringing relief after Sunday night saw police fire tear gas and pepper spray at protesters in the financial hub.

However, some of the city's key roads remained closed off, with the demonstrators refusing to move until Beijing agrees to its demands for full universal suffrage.

The campaign comes as China's Golden Week holiday begins on Wednesday, when big-spending mainlanders normally visit the city's luxury stores.

While there are fears about the impact on the city's economy Laura Luo, head of Hong Kong and China equities at Baring Asset Management, said the effects of the standoff on Hong Kong stocks would be limited.

"It is natural for investors to choose to take profit in an event like this, but any major market plunge may present a good entry point for long-term investors," she told Dow Jones Newswires.

Adding downward pressure on shares was HSBC's final purchasing managers' index (PMI) for China which came in at 50.2 for September.

While it was above the 50-point level that separates growth from contraction, it is lower than the 50.5 predicted in last week's preliminary reading and adds to fears about the Chinese economy following a series of soft data.

In Japan official data showed factory production unexpectedly fell 1.5% month-on-month in August, reversing a 0.4% uptick in July. Output grew at its fastest rate in more than two years in January before losing steam.

Also, household spending dropped a steeper-than-expected 4.7% in August, logging a year-on-year drop for the fifth straight month since a sales tax rise in April.

The figures raised concerns that the tax hike continues to weigh on consumption and the economy.

Foreign exchange trading saw the dollar at ¥109.40 against ¥109.45 in New York late Monday as it takes a breather before the release of US data this week, with some economists predicting it will bounce back and pass ¥110 soon.

The euro bought $1.2684 and ¥138.77, against $1.2686 and ¥138.87 in New York

On Wall St Monday dealers took their cash off the table as they warily eye events in Hong Kong, while looking ahead to the US data releases, culminating in jobs creation figures on Friday.

The Dow slipped 0.25%, the S&P 500 also lost 0.25% and the Nasdaq fell 0.14%.

On oil markets US benchmark West Texas Intermediate for November delivery was up nine cents at $94.66 a barrel and Brent crude added 53 cents to $97.73.

Gold was at $1 207.30 an ounce against $1 219.65 late Monday.

In other markets:

Taipei was flat, edging up 6.16 points to 8 967.

Smartphone maker HTC rose 1.54% to Tw$132.0, while Taiwan Semiconductor Manufacturing fell 0.41% to Tw$120.0.

Wellington ended marginally lower, dipping 4.47 points to 5 255.

Spark was up 0.34% at NZ$2.97 and Fletcher Building was steady at NZ$8.78.

Manila closed 0.13% higher, adding 9.69 points to 7 275.

Energy Development gained 3.46% to 8.08 pesos while Philippine Long Distance Telephone rose 0.19% to 3 096 pesos.

Bangkok slipped 0.01%, or 0.12 points, to 1 586.

Coal producer Banpu lost 0.84% to 29.50 while Bangkok Bank added 0.49% to 204.00 baht.

Kuala Lumpur ended flat at 1 846.

SapuraKencana Petroleum lost 0.7% to 4.12 ringgit, while RHB Capital fell 0.5% to 8.83. Axiata Group inched up 0.1% to 7.00 ringgit.

Jakarta ended down 0.09%, or 4.43 points, at 5 137.

Hero Supermarket climbed 1.80% to 2 545 rupiah, while Indah Kiat Pulp & Paper lost 0.94% to 1 055 rupiah.

Singapore closed down 0.39%, or 12.98 points, to 3 277.

United Overseas Bank eased 0.71% to Sg$22.40 while public transport firm ComfortDelGro fell 4.00% to Sg$2.40.

Mumbai was up 0.13%, or 33.40 points, at 6 630.

Eicher Motors gained 6.24% to 11 987 rupees, while Indiabulls Real Estate fell 5.33% to 67.55 rupees.