Asian shares closed mostly lower on Tuesday as renewed fears over the possibility of a Greek default on its debt kept many investors at bay. Political leaders in Greece delayed a decision on securing a 130 billion euro bailout package on Monday, dragging the euro down against the dollar and yen.
As Greece's political leaders struggle to reach agreement on spending cuts, German Chancellor Angela Merkel said in a joint briefing with French President Nicolas Sarkozy that the debt-strapped country is running out of time to reach a deal with creditors.
The bailout package must be approved by the euro zone, the European Central Bank and the International Monetary Fund before February 15 in order to prevent the eurozone member nation from defaulting on its debts when it faces repayment of 14.5 billion euros in bonds on March 20.
Tokyo shares ended slightly weaker, as traders continued to watch for signs that Greece will avoid a default on its massive sovereign debt. The Nikkei average edged down 0.1 percent while the broader Topix index finished 0.4 percent higher, underscoring relatively strong underlying sentiment. Dainippon Screen Manufacturing plunged 7.1 percent after the company slashed its full-year net income forecast by 35 percent to Y6.5 billion, citing impairment losses on production facilities.
Suzuki Motor fell 1.8 percent after the company reported a 4.7 percent drop in group net profit for the April-December period and downgraded its annual sales forecast. Nippon Sheet Glass lost 2.3 percent on a brokerage downgrade. Among those that gained, Japan Tobacco jumped 5.5 percent after the firm lifted its full-year net profit forecast.
China's Shanghai Composite index fe11 1.7 percent after the International Monetary Fund said the Chinese economy would experience nearly 4 percentage points reduction in its growth rate projected for this year if the debt crisis in Europe intensifies.
Hong Kong's Hang Seng index slipped marginally, weighed down by weakness in mainland Chinese shares, as policy makers held off from cutting lenders' reserve requirements that many banks had forecast for January.
Australian shares lost ground after the Reserve Bank of Australia surprisingly kept interest rates on hold at 4.25 percent, despite the uncertain global economic outlook. Both the benchmark S&P/ASX 200 and the broader All Ordinaries index ended down about half a percent each. The Australian dollar rose to a fresh six-month high against the U.S. dollar after the central bank cited inflation close to target and strong U.S. economic data among reasons for leaving its cash target rate unchanged.
NAB led the losses in the banking sector, tumbling 4 percent after the lender said it its reviewing its U.K. operations. Westpac lost half a percent and Commonwealth shed 0.7 percent, while ANZ edged up 0.1 percent. Macquarie Group slipped 0.8 percent after the investment bank forecast a 25 percent fall in annual profit. Retailers also came under selling pressure, with Myer Holdings and David Jones falling around 2 percent each.
Among the major miners, BHP Billiton declined 0.8 percent, while Rio Tinto and Fortescue lost around 2 percent each. Cochlear soared 7.6 percent after the maker of the world's best-selling ear implant reported a lower-than-expected net loss of $20 million for the half year to December following a mass recall of one of its bionic ear devices.
South Korea's Kospi average ended a range-bound session 0.4 percent higher as optimism over the American economy outweighed the wrangling over Greece's debt restructuring talks. Overseas investors bought a net 360 billion won worth of shares on the day, while domestic institutions remained net sellers for the 11th straight session, offloading 66.2 billion won worth of shares, data showed.
Automakers paced the gains, with Hyundai Motor rallying 3.1 percent and parts-maker Hyundai Mobis climbing 5 percent, on expectations that the Korea-United States Free Trade Agreement may be implemented as early as March. Tech shares lost ground, with LG Electronics, Hynix and LG Display losing 2-5 percent. KT Corp fell 1.8 percent after the nation's largest phone and internet company reported a 12.5 percent rise in fourth-quarter profit, aided by gains from asset sales.
In economic news, the South Korean economy will grow at a slower pace in the first half of this year before making a moderate rebound in the second half of 2012 on improving external conditions, the Bank of Korea said in a report to a parliamentary committee.
New Zealand shares posted modest gains, with the benchmark NZX-50 edging up 0.1 percent, as investors looked ahead to earnings announcements. Fletcher Building, the nation's biggest construction firm, rose 2 percent, rural services firm PGG Wrightson rallied 5 percent and tapware manufacturer Methven climbed 4.8 percent, while retailer Warehouse Group lost lost 2.4 percent and phone company Telecom fell 1.6 percent.
Hallenstein Glasson Holdings edged down 0.3 percent and Michael Hill International shed 1.2 percent, while outdoor clothing and equipment company Kathmandu Holdings advanced 2.4 percent.
New Zealanders boosted spending on their Eftpos cards by 3.5 per cent in January, showing tepid growth, according to transaction processor Paymark, which processes about three-quarter of all electronic transactions in New Zealand. Auckland International Airport gained 0.2 percent after the country's biggest gateway reported monthly gains in both international and domestic passenger numbers in December.
Elsewhere, India's Sensex was last trading down 0.2 percent, reversing initial gains, after the government revised down its economic growth forecast for the current fiscal year to 6.9 percent, its slowest pace in three years. Indonesia's Jakarta Composite index was down half a percent, but Singapore's Straits Times edged up 0.6 percent and the Taiwan Weighed average added 0.3 percent.
On Wall Street, the major averages ended marginally lower on Monday, as traders locked in some profits after recent gains amid continued worries about the stalemate in Greece's debt talks.
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