Asian markets mostly fell after a recent rally as investors cashed in while also looking ahead to key central bank meetings that could provide some idea about monetary policy in the new year. Wall Street provided yet another record-breaking lead as the selling that hit equities at the start of the month abates, while energy firms were supported by stronger oil prices.
The week kicked off on a high following forecast-busting jobs data from the US on Friday, which reinforced the view that the world's top economy is in rude health. But dealers cashed out on Tuesday, with analysts also pointing to thinning volumes towards the end of the year.
Tokyo's Nikkei ended down 0.3 percent, while Shanghai sank more than one percent by the close and Hong Kong was off 0.6 percent. Seoul shed 0.4 percent, Singapore was off 0.2 percent and Taipei eased 0.3 percent. Manila, Bangkok and Jakarta were also lower, though Sydney closed up 0.3 percent.
Despite the retreat analysts were upbeat for the region's markets. "It's been a few good days on Asia's stock markets as last week's swoon gave way to renewed confidence," said Greg McKenna, chief market strategist at AxiTrader. He added that "save for the recent weakness Asian stock markets have generally performed reasonably well over the past few months". McKenna attributed the recent losses to profit-taking and lingering concerns about China's economy "rather than anything chronic or outright negative".
Focus is now on the last policy meetings of central banks in the US, Britain and the eurozone this week. While the Federal Reserve is expected to lift interest rates again, the key will be comments from bank boss Janet Yellen, which will be scanned for clues about its timetable for future increases.
In early European trade London rose 0.2 percent, while Paris and Frankfurt each added 0.1 percent.
Tokyo - Nikkei 225: DOWN 0.3 percent at 22,866.17 (close)
Hong Kong - Hang Seng: DOWN 0.6 percent at 28,793.88 (close)
Shanghai - Composite: DOWN 1.3 percent at 3,280.81 (close)
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