Asia Stocks sink with Japan losing its Gains

Asian markets ended lower Thursday, with Japan losing early gains as the yen turned higher, while separate readings on China’s manufacturing sector pointed to a weakening in the world’s second-largest economy. Australia’s S&P/ASX 200 Index (AU:XJO) -1.00% dropped 1%, Hong Kong’s Hang Seng Index (HK:HIS) -1.35% fell 1.5%, Japan’s Nikkei Stock Average (JP:NIK) -0.18% shed 0.2%, and the Shanghai Composite (CN:000001) -0.10% slipped 0.1%.

South Korea’s Kospi (KR:0100) +1.33% was closed for a holiday.

Losses for many real-estate shares weighed in Hong Kong: China Resources Land Ltd. (HK:1109) -6.74% CRBJF +2.73% fell 6.7%, Agile Property Holdings Ltd. (HK:3383) -5.74% AGPYY +59.20% lost 5.7%, and Guangzhou R&F Properties Co. (HK:2777) -8.01% GZUHY +7.45% dropped 8.1%.

“The Hong Kong market is going into a gradual consolidation phase,” said Linus Yip, First Shanghai Securities strategist in Hong Kong. “Property plays have already shot up a lot, so selling pressure is quite strong.”

Property firms were also dragging TOLAY +0.17% g in Japan, with Tokyu Land Corp. (JP:8815) -3.84% TOLAY +0.17% down 3.8% and Tokyo Tatemono Co. (JP:8804) -4.23% TYTMY 0.00% sagging 4.2%.

Meanwhile, a pair of key Chinese manufacturing surveys — one from a government-backed group and another from HSBC — offered a split decision on the sector.

The official China manufacturing Purchasing Managers’ Index rose to 51.0, indicating mild expansion and showing “things are a little more stable,” according to Yip.

However, HSBC’s subsequent PMI release printed at 49.6, just below the 50 mark that separates overall growth from contraction, but underling data in survey showed surging input prices and deteriorating new orders, suggesting further weakening in the nation’s economy. Read more on China’s PMI’s.

The Japanese yen USDJPY -0.07% strengthened during the day, with the dollar falling back below the ¥81-level, prompting some blue-chip exporters’ earlier gains to melt away.

Among the larger movers, Mazda Motor Corp. JP:7261 -2.99% MZDAY +0.48% , dropped 3%, while Sharp Corp. JP:6753 -3.15% SHCAY -1.69% gave up 3.2%.

However, shares in Softbank Corp. (JP:9984) +1.98% SFTBF +0.17% added 2% after Kyodo News reported the firm’s mobile-carrier unit won key spectrum which will allow it to better compete against larger rivals NTT DoCoMo Inc. (JP:9437) +0.50% NTDMF -3.36% and KDDI Corp. JP:9433 +1.16% KDDIF -1.42%

NTT DoCoMo stock added 0.5%, while KDDI rose 1.2%.

Over in Australia, miners dragged on the market after commodity prices weakened overnight.

BHP Billiton Ltd. (AU:BHP) -1.52% BHP -0.55% traded down 1.5%, while Rio Tinto Ltd. AU:RIO -1.78% RIO +1.33% gave up 1.8%, and Fortescue Metals Group Ltd. (AU:FMG) -0.72% FSUMY +1.43% shed 0.7%.

Reporting season neared a close in Australia, with a first-half result from grocery major Woolworths Ltd. (AU:WOW) -0.04% WLWHY -3.22% .

Woolworths’ shares ended almost flat after profit dropped 17% on restructuring costs and sale of its Dick Smith electronics stores, but came in broadly in line with market expectations. See report on Woolworths earnings.

The weakness in many Asia markets came after U.S. stocks faltered Wednesday as Federal Reserve Chairman Ben Bernanke dashed hopes of additional quantitative easing and expressed a cautious view on the domestic recovery.