ASIA MARKETS: Asia Stocks Mostly Lower, But Japan Moves Higher

By Daniel Inman

Asian markets were mostly down on Tuesday, with Shanghai leading the region lower, while Australia was weighed by further falls in mining stocks.

The Shanghai Composite lost 0.9% to 2,066.70 after data showed that China attracted less foreign direct investment in May -- down 6.7% from a year earlier at $8.6 billion. Furthermore, there were concerns that the government's attempts to stimulate the economy will have a little effect. This was especially evident in bank stocks, which fell just one day after rising on news that some midsize lenders had received approval from the central bank to cut the amount of cash that they have to set aside as reserves.

"The policy makers are focused on targeted easing, so the effect from the bank's targeted reserve requirement cuts on the stock market are easily worn off," said Deng Wenyuan, analyst at Soochow Securities.

China Minsheng Banking declined 0.8% and Industrial Bank was 1.5% lower.

Australia's S&P/ASX 200 lost 0.2% to 5,400.70, as mining companies were hit by further falls in the price of iron ore, which fell 2% to a fresh 21-month low. Rio Tinto (RIO) lost 1% and Fortescue Metals Group (FSUMY) was 3% lower

Energy stocks in Sydney were also weighed by news that Royal Dutch Shell is selling 3.2 billion Australian dollars ($2.99 billion) worth of shares in Woodside Petroleum to institutional investors, which were selling other stocks to buy into the deal -- especially in the energy sector, with Oil Search down 0.5% and Santos down 1.5%.

Elsewhere in Asia, South Korea's Kospi rose by 0.4% to 2,001.55, Hong Kong's Hang Seng Index fell 0.4% to 23,203.59, and Singapore's Straits Times was down 0.5% late in Asia.

The Nikkei bucked the region's downward trend starting the day 0.6% higher, as the market recovered from a 1.1% drop on Monday -- the index's largest daily fall in a month. The index gave up some of those gains as the session progressed, and ended up 0.3% to 14,975.97.

Tokyo stocks were supported by a weaker yen, which stabilized after the dollar softened overnight. The dollar (USDJPY) was last trading at Yen102.01, compared with Yen101.83 late Monday in New York.

Trading was generally quiet, following a flat session in the U.S. overnight, as markets waited for the conclusion of the Federal Reserve's policy meeting on Wednesday, which will give an update on the direction of monetary policy in the world's largest economy.

More MarketWatch news:

Japan's Abe unveils corporate-tax cut, other reforms

Asia Stocks live blog: Policy plays in Japan and China

IMF urges U.S. to raise minimum wage

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