Asia Markets Finish Mixed

Asian stock markets ended on a mixed note following a choppy trading session Wednesday as Chinese manufacturing data undercut expectations Beijing will shortly ease its monetary policy.

China's Shanghai Composite Index fell 1.1% to 2268.08, Australia's S&P/ASX 200 index declined 0.9% to 4225.7 and Hong Kong's Hang Seng Index dropped 0.3% to 20333.37.

On the rise were South Korea's Kospi, which ended up 0.2% at 1959.24; Japan's Nikkei Stock Average, 0.1% higher at 8809.79; and Taiwan's Taiex, 0.4% ahead at 7549.21.

China's official Purchasing Managers' Index for January came in at 50.5, up from 50.3 in December and ahead if expectations for a drop to 49.5. But a separate, private-sector survey by HSBC put the January PMI at 48.8, also up a little from December's 48.7, but below the 50 level that separates expansion from contraction.

Conita Hung, head of equity markets at Delta Asian Financial Group, said that while China will eventually loosen policy by reducing banks' reserve requirement ratio, the PMI data were unlikely to be the trigger.

"I would say the Chinese government will monitor bank lending and market conditions... (they may) wait for another two weeks and then decide whether to cut," Ms. Hung said. If the reserve ratio isn't cut, she added, "the markets may be volatile."

Markets in Asia usually closely track China's manufacturing PMI—considered to be a leading indicator of the economy there—as China is a major trading partner with several countries in the region and is an outsized force behind global demand for commodities.

Other HSBC PMI surveys Wednesday showed a continued contraction in manufacturing activity in South Korea and Taiwan, although the reading for India jumped to 57.5 in January, from 54.2 in December.

Data released by South Korea also showed the nation's exports in January fell for the first time since October 2009, strengthening expectations for an interest-rate cut by the Bank of Korea.

The mixed performance for Asian stocks followed a mostly lower close for U.S. stocks Tuesday, with some weak earnings reports and economic data weighing on Wall Street sentiment.

Commodity- and property-related stocks were broadly lower in Shanghai, where Jiangxi Copper dropped 3.8%, Aluminum Corp. of China shed 3.4% and property major Gemdale lost 1.3%.

In Hong Kong, some local property stocks declined after the special administrative region's Financial Secretary John Tsang proposed in his annual budget address that the government continue to increase the supply of land. Cheung Kong Holdings gave up 0.9% and Sino Land fell 3.6%.

In Tokyo, Daiwa Securities Group and Shinsei Bank fell 1.8% and 2.3%, respectively. Both financial companies had reported relatively weak results late Tuesday. But gains in other banking shares supported the broader Japanese market, with Sumitomo Mitsui Trust Holdings rising 3.4% and Mitsubishi UFJ Financial Group advancing 2.9%.

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Australia also had some earnings-related selling, with Energy Resources of Australia taking a 14% dive after the uranium miner swung to a fiscal-year net loss. Aquarius Platinum Ltd. plunged 13% after reporting a 4% drop in quarterly production.

Fairfax Media managed to buck the broader trend in Australia, jumping 10% after reports emerged late Tuesday that billionaire investor Gina Rinehart increases her stake.

In Seoul, LG Electronics rose 1.9%, reversing early declines, after reporting a narrowing of its losses in the fourth quarter.