Asian stocks fluctuated before closing mixed on Tuesday, as a sell-off in oil futures, the uncertainty surrounding the U.S. election and expectations of a December Fed rate hike offset fresh signs of strength in the world's second-largest economy.
The latest survey from the National Bureau of Statistics revealed that activity in China's vast manufacturing sector continued to expand in October, and at a much faster pace, with a manufacturing PMI score of 51.2. The Caixin manufacturing PMI rose to 51.2 in October, marking the fastest pace of improvement since March 2011.
China's benchmark Shanghai Composite index ended the session up 21.94 points or 0.71 percent at 3,122.44 while Hong Kong's Hang Seng index is up 244 points or 1.06 percent at 23,178.
Other regional manufacturing surveys painted a mixed picture. Japanese manufacturing activity expanded at the fastest pace in nine months in October, Australia's manufacturing returned to growth after two months of contraction and Taiwan's manufacturing sector expanded at a faster rate, while manufacturing activity levels across Malaysia and South Korea continued to contract in the month.
Meanwhile, the Federal Reserve is widely expected to leave short-term interest rates unchanged when it completes its two-day policy meeting on Wednesday. All eyes are on the accompanying statement considering the rise in market expectations for a rate hike in December.
Japanese shares closed a tad higher as the Bank of Japan left its monetary policy settings unchanged in a seven-to-two vote and revised down its inflation forecasts. The Nikkei average inched up 17.38 points or 0.10 percent to 17,442.40 while the broader Topix index ended flat at 1,393.19.
Among the prominent gainers, Mitsubishi Electric, Alps Electric, Tokyo Electron, Kirin, Nikon and Sumitomo Heavy Industries climbed 3-5 percent.
Panasonic shares slumped 6.5 percent after the electronics company cut its annual profit forecast, citing the impact of a strong yen and a poor showing in its solar panel business. Similarly, industrial robot maker Fanuc tumbled 4.3 percent after posting slower sales and profits for the half-year ended September.
Australian shares retreated as the Reserve Bank of Australia kept interest rates unchanged, as widely expected, and offered no hints of further easing. The benchmark S&P/ASX 200 dropped 27.20 points or 0.51 percent to 5,290.50, dragged down by financials, miners and energy stocks. The broader All Ordinaries index closed 27.20 points or 0.50 percent lower at 5,375.20.
Banks ANZ, Commonwealth and NAB fell between 0.4 percent and 1.1 percent. Weak oil prices weighed on the energy sector, with Woodside Petroleum and Santos closing down 1.3 percent and 1.7 percent, respectively.
Mining giant BHP Billiton fell 1.2 percent to snap two days of gains. South32 rallied 2.3 percent despite flagging a further hit to coking coal production. Airline Qantas lost 2.3 percent to extend losses after issuing a profit warning.
Seoul shares closed marginally lower as investors avoided making big bets amid growing political uncertainties at home and abroad. The Kospi average slipped 0.80 point or 0.04 percent to 2,007.39. Chip maker SK Hynix bucked the weak trend to close 2.4 percent higher, thanks to a steady recovery in chip prices on stronger demand.
South Korea's exports fell in October, but the pace of decline slowed from the previous month as shipments of semiconductors and ships helped offset fallout from the labor strikes in major automakers and the discontinuation of Samsung Electronics' fire-prone Galaxy Note 7 smartphone, preliminary data from the trade ministry showed today.
New Zealand shares drifted lower, with the benchmark S&P/NZX 50 index falling 30.19 points or 0.43 percent to 6,930.49 amid increased uncertainty over the upcoming U.S. presidential election.
Sky Network Television shares fell 2.6 percent to extend Monday's losses after the New Zealand Commerce Commission wrote to Sky and Vodafone seeking further details on their planned merger. Xero, Genesis Energy, Kathmandu Holdings and Metlifecare dropped around 2 percent each.
India's Sensex is moving up 0.3 percent as core sector output and manufacturing data painted a positive picture of the economy.
Singapore's Straits Times index is gaining 0.1 percent and Malaysian shares are marginally higher, while Indonesia's Jakarta Composite index is little changed and the Taiwan Weighted slipped 0.2 percent.
Overnight, U.S. stocks closed marginally lower as caution crept in ahead of central bank meetings, Friday's jobs report and next week's election. Mixed readings on personal income, spending and Chicago-area business activity, and an investigation into Hillary Clinton emails also kept investors nervous.
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