Shanghai, Korea stocks lead Asia lower; global data fails to inspire
Asian shares followed their U.S. peers lower on Friday despite upbeat global economic data as profit-taking set in amid low trading volumes. Japanese markets remained closed and will resume trade on January 6.
Wall Street recorded its first negative start to a year since 2008 as investors took profits on recent gains. The Dow posted its worst day in two months, with better-than-expected manufacturing reports in the U.S. and Europe failing to offer much comfort.
Attention now turns to a raft of speeches from Federal Reserve officials later in the day. Fed chief Ben Bernanke, alongside Plosser, Lacker, Stein, Dudley and Rosengren are due to speak and markets will be looking for hints of further reductions in monthly bond purchases.
(Read more: 'Dr. Doom' Roubini gets bullish on global economy)
Shanghai 1.2% lower
Mainland shares extended losses for a third session following a drop in December's services purchasing manager's index (PMI). The data follows Thursday's lackluster factory activity and points to a cooling trend in the world's second-largest economy.
Insurance and brokerages were sold-off on news that local governments have been given the green-light to issue bonds as a way for them to avoid defaulting on massive debt loads. Pudong Development Bank and Citic Securities fell over 2 percent each.
The benchmark Shanghai Composite index hit a one-week low and has been trading below it's 200-day simple moving average for nearly three weeks now.
Kospi eases 1%
South Korean shares closed at their lowest levels in four months, extending the previous day's 2 percent decline due to steep losses in blue-chip stocks.
Index heavyweight Samsung Electronics lost 1 percent following it's previous 5 percent plunge after several brokerage downgrades for its October-December quarterly earnings.
Thursday saw stocks post their biggest daily percentage fall since July 2012 on concerns over the rapid pace of the yen's decline.
(Read more: Could currency wars make a comeback in 2014?)
Emerging markets lower
Thailand's benchmark SET index eased 0.5 percent to hit it's lowest level since August 2012 following the previous day's 5 percent plunge on uncertainty about February snap elections. Meanwhile, the baht hit a four-year low against the greenback.
(Read more: Why you shouldn't pounce on Thai shares yet)
Meanwhile, Indian shares extended losses by 0.2 percent while the rupee hit a two-week low against the greenback.
Sydney slips 0.6%
Miners declined following the release of sluggish Chinese factory growth on Thursday; Fortescue Metals and Atlas Iron slid 2 percent each. Chinese manufacturers are among the biggest customers for Australian miners.
But gold stocks bucked the trend as the precious metal hit a 2-week high. Kingsgate Consolidated rallied over 6 percent while Alacer Gold climbed 5 percent.
— By CNBC.com's Nyshka Chandran. Follow her on Twitter @NyshkaCNBC