ASIA MARKETS: Asian Shares End Mixed

By Mia Lamar and Daniel Inman

Stocks in Hong Kong fell on signs of further contraction in China's manufacturing sector, while a rally on Wall Street bolstered Japan in a quiet, holiday-shortened week for regional markets.

A strong session for U.S. stocks that sent the S&P 500 (SPX) to its sixth-straight positive close drove sentiment in Australia and Japan. The S&P 500 gained 0.4% on Tuesday to 1879.55, notching its longest winning streak since mid-September.

A string of upbeat U.S. corporate earnings reports "have again been the perfect distraction from concerning lofty tech valuations," said Timothy Radford, global investment manager at Australian brokerage Rivkin, referring to a sharp selloff of highflying technology stocks that has rattled global markets over the past month.

Japan's Nikkei 225 index rose 1.1% to 14,546.27. Gains came as the U.S. dollar was little changed against the yen, trading at Yen102.53 versus Yen102.61 late Tuesday in New York. The beginning of U.S. President Barack Obama's three-day state visit to Japan was on the radar in Tokyo as traders watched for any progress on trade talks.

Japanese railroad and hotel-chain operator Seibu Holdings Inc. traded higher in its return as a public company, gaining 10.6% over its initial public offering price. The company's core entity, Seibu Railway Co., was delisted from the Tokyo Stock Exchange in December 2004 for doctoring its financial statements.

 
   In Australia, the S&P/ASX 200   rose 0.7% to 5517.80. 
 

Elsewhere, negative economic data from China weighed on markets, as manufacturing activity in the region's largest economy showed another month of contraction. A preliminary report from HSBC on China's manufacturing sector in April came out at 48.3 from a final reading of 48.0 in March, remaining below the 50 mark that distinguishes expansion from contraction.

Hong Kong's Hang Seng Index fell 1% to 22509.64 and the Shanghai Composite was off 0.3% at 2067.38.

Disappointing earnings from blue-chip Chinese companies also weighed on stocks in Hong Kong and Shanghai. Shares of China Mobile Ltd. (CHL) , the world's largest telecom carrier by subscribers, fell 2.6% in Hong Kong after the company said intensifying competition and handset subsidies for Apple Inc.'s (AAPL) iPhones hurt its first-quarter earnings.

"Domestic demand showed mild improvement and deflationary pressures eased, but downside risks to growth are still evident as both new export orders and employment contracted," HSBC economist Qu Hongbin said.

South Korea's Kospi lost 0.2% to 2000.37 and Singapore's Straits Times Index was 0.8% lower late in Asia.

More MarketWatch news:

Asia Stocks blog: China data back in spotlight

Chinese factory data show mild rebound

Companies say it's tougher to keep skilled employees

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