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Asia stocks lower after China inflation data; Shanghai at 5-month low

Thursday, 9 Jan 2014 | 6:18 AM ET

Asian equity markets were mostly lower on Thursday after China's annual consumer inflation hit a seven-month low in December.

Chinese consumer inflation slowed to 2.5 percent in December from November's 3 percent figure, coming in below Reuters expectations for a 2.7 percent gain, while producer prices fell 1.4 percent from a year earlier.

"The market seems to have taken the falls [in Chinese inflation] in their stride, although it gives the PBOC room to maneuvered. The major issue and the conundrum authorities face here is how they support inflation without boosting credit supply," said Chris Weston, market strategist at IG in a note.

(Read more: Five things that keep Goldman Sachs up at night)

  Name Price   Change %Change
NIKKEI
---
HSI
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ASX 200
---
SHANGHAI
---
KOSPI
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CNBC 100
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Fed minutes, US jobs in focus

Wall Street shares finished mixed on Wednesday after minutes from the Federal Reserve's December meeting revealed that most officials saw a decrease in monthly asset purchases as a cautious first step towards normalizing monetary policy after a long period of quantitative easing.

(Read more: Dream run in US stocks set to end: HSBC)

Why taper will only end in 2015
Ed Ponsi, Managing Director at Barchetta Capital Management, describes why the U.S. economic recovery remains tepid, which will see tapering last into 2014.

Meanwhile, the ADP Research Institute reported that hiring among U.S. companies in December rose to a thirteen-month high. The data has raised expectations that the government's December employment report, due on Friday, could be more robust than economists expect.

Nikkei drops 1.5%

Japan's benchmark Nikkei index fell to a one-week low after rallying 2 percent in the previous session. A round of profit-taking was to blame as well as a slightly stronger currency with dollar-yen retreating from the 105 mark.

(Read more: Look to Japan for top 2014 play: Gemma Godfrey)

Nintendo fell 2.7 percent after the previous day's 11 percent rally following news that China lifted a ban on foreign consoles.

Sony rallied nearly 4 percent following a 6 percent rally in its U.S.-listed shares after CEO Kazuo Hirai was reported as saying the firm plans to double smartphone sales in two years.

Shanghai 0.8% lower

China's benchmark Shanghai Composite closed at its lowest level since August on concerns of a liquidity squeeze from a wave of initial public offerings, China's first ones in over a year. News that the People's Bank of China skipped open market operations for a fifth straight session also hurt sentiment.

(Read more: First wave of Chinese IPOs gets underway)

Financials bore the brunt of losses with Haitong Securities nearly 3 percent lower and ICBC down 1.2 percent.

Why being unpopular can pay off for emerging markets
Richard Titherington, CIO & Head of Emerging Markets Equity Team, J.P. Morgan Asset Management, describes why it may be time for investors to start looking at emerging markets.

Sydney rises 0.1%

Australia's benchmark S&P ASX 200 reversed losses to end in positive territory after November retail sales data beat estimates to post a 0.7 percent monthly gain.That saw retailers David Jones end 1.3 percent higher and Harvey Norman gain 1 percent.

Home builders rose after data showed the number of Australian building permits declined in November. Bluescope Steel led gains by over 1 percent.

Qantas Airways rallied nearly 2 percent despite news that Moody's downgraded the airline's rating with a negative outlook.

Kospi 0.6% lower

South Korean shares closed at their lowest level in over four months after the Bank of Korea left its base rate unchanged at 2.5 percent, as widely expected.

Large-cap stocks were sold off with Hyundai Motor and Kia Motors down over 2 percent while Samsung Electronics eased 1.2 percent.

(Read more: Emerging vs developed? What if it's not a competition?)

Emerging markets lower

India's Sensex index dipped 0.2 percent and closed marginally lower even after data showed that foreign investors broke a three-day selling streak on Wednesday.

Meanwhile, Thailand's SET Index rallied over 1 percent and finished marginally higher despite a survey showing consumer confidence took a hit last month due to ongoing protests in Bangkok.

By CNBC.com's Nyshka Chandran. Follow her on Twitter @NyshkaCNBC

  Price   Change %Change
NIKKEI
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ASX 200
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DJIA
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S&P 500
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AUD/USD
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FMG
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JPY/USD
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USD/KRW
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QAN
---
7974.T
---
6758.T
---
DJS
---
593
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BSL
---
6657
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