HONG KONG - Asian markets mostly fell on Tuesday following Wall Street's losses after a better-than-expected US manufacturing report heightened speculation that the Federal Reserve will begin winding down its stimulus this month.
Japanese shares bucked the downward trend as the yen slipped against the dollar, which moved closer to the four-and-a-half-year high touched in May.
Tokyo rose 0.60 per cent, or 94.59 points, to 15,749.66, Sydney lost 0.44 per cent, or 23.4 points, to end at 5,256.1 and Seoul fell 1.05 per cent, or 21.42 points, to 2,009.36.
Hong Kong closed 0.53 per cent, or 128.08 points, lower at 23,910.47. But Shanghai added 0.69 per cent, or 15.30 points, to 2,222.67 as bargain-hunters moved in following Monday's losses that were fuelled by an expected return of initial public offerings after a year-long hiatus.
In the United States, the Institute for Supply Management said Monday that factory activity grew at a much faster rate in November than in October.
The institute said its purchasing managers' index rose to 57.3 last month from 56.4 in October, despite expectations of a slight fall. The index is up 7.1 points since the beginning of the year.
A figure above 50 indicates growth while anything below points to contraction.
The news raised the prospect the Fed will start to cut back its US$85 billion a month bond-buying programme this month as the economy shows signs of improving, said Kathy Lien, a managing director at BK Asset Management.
National Australia Bank said a December Fed taper "is back on the cards, at least for markets".
On Wall Street the three main indexes fell on the news, while profit-takers also moved in on the first full day of trading after Thursday's Thanksgiving holiday.