Extended weakness in Chinese shares, driven by worries over liquidity and earnings, put a brake on other Asian stock markets on Tuesday despite Wall Street stocks rallying into a fifth session.
Although Japan's Nikkei share average held onto marginal gains and was up 0.3 percent, MSCI's broadest index of Asia-Pacific shares outside Japan was almost flat, while trading not far from a six-month high hit earlier this month.
The China Enterprises Index of the leading offshore Chinese listings in Hong Kong fell 1 percent to its lowest in nearly four weeks. That subdued other Asian markets, forcing investors to look past the longest winning streak since October in the S&P 500 index.
"Today is going to be a bit weak," said Du Changchun, an analyst at Northeast Securities in Shanghai. "I'm not so optimistic, I don't think there's much space for any increases as we're still in a period of adjustment."
The Shanghai Composite Index was almost flat around 2,063.5 points on Tuesday, after having shed 1.5 percent the previous day.
Chinese stocks have been hit by concerns about a potential share oversupply after the securities regulator released draft prospectuses for 28 new firms planning to list, marking the resumption of IPOs after a two-month hiatus.
Chinese companies such as Great Wall Motor Co Ltd, carmaker BYD and Air China have all posted weak earnings numbers or expected earnings numbers over the past week, leading to further concerns over the slowing economy.
Source: Reuters
