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Asian Stocks Struggle After Monday's Selloff

Asian indexes were a mixed bag on Tuesday in a choppy session. A late turnaround in U.S. markets overnight when the dollar pulled back from a four-year high against the euro, failed to inspire investors as they remained wary of the problems in Europe.

News that the U.S. Senate would oppose IMF bailout packages to countries that are unlikely to repay them, raised concerns about the spread of Greek debt problems.

Japan's Nikkei average finished flat after staying on positive ground much of the day, with exporters making some gains while Mitsubishi Corp and other trading houses slid after industrial metals prices plunged the day before.

The benchmark Nikkei earlier rose on short-covering after losing nearly 4 percent in the past two days, but strength in the yen against the euro amid investor caution about the euro zone's fiscal woes weighed, market players said.

The benchmark Nikkei added 6.88 points to 10,242.64, off a 10-week closing low hit the previous day.

The broader Topix dipped 0.7 percent to 913.91.

Chip-tester maker Advantest pared earlier gains to end up 0.18 percent. tech equipment maker Fanuc rose 1.5 percent and Sony advanced 0.6 percent.

But Mitsubishi Corp and other trading houses slipped after industrial metals prices plunged on Monday, with copper prices falling to their lowest since February, after signs that China's economy was slowing spooked investors already worried about Europe's fiscal woes.

Mitsubishi lost 1.55 percent and Sumitomo Corp declined 2.1 percent

DIC tumbled 7.6 percent to 171 yen after the ink and synthetic resin maker said it plans to raise as much as 21.4 billion yen through a public share offering, leading to a share dilution of about 15.9 percent.

Seoul Shares Slip

Seoul shares extended losses on Tuesday, failing to maintain a rebound at the open, as declines in some technology stocks and automakers weighed amid fragile sentiment on the euro zone's lingering debt problems.

Foreign investors continued net selling for a third consecutive session, sending the Korea Composite Stock Price Index 0.5 percent lower to close at 1,643.24 points.

Hynix Semiconductor, the world's No. 2 memory chip maker, fell 3.59 percent and LG Display declined 3.87 percent following aggressive investment plans of $16 billion by bigger rival Samsung Electronics.

In addition, Hynix said that it has received notice from the European Commission that it is facing a fine for price-fixing charges and that the amount of the fine will be announced Wednesday.

Kia Motors dropped 7.73 percent after weak European car sales data.

But retailers outperformed. Hyundai Department Store surged 8 percent and Lotte Shopping jumped 3.3 percent after government data showing sales growth in South Korea's top three department store chains almost doubled in April.

Banks and construction companies were among the gainers, with Hyundai Engineering & Construction up 1.6 percent.

KB Financial Group rose 1.56 percent and Samsung Life rose 2.33 percent.

Australia Ends Flat

Australian shares eked out a tiny gain, failing to capitalize on a late bounce on Wall Street with investors worried about the European bailout and a planned profits tax on mining companies.

The Australian market has dropped seven percent so far this month, rocked by global volatility on European debt jitters and concern that a proposed new tax will slow mining investment.

Takeover activity that had helped power the market over the past few months appeared to be fizzling, too.

Macarthur Coal, once the target of three bids, sinking 15.7 percent to A$11.25 after rejecting the latest, trimmed offer from U.S. miner Peabody Energy. The Australian miner said the $3.3 billion bid was too cheap and the conditions were unacceptable.

The benchmark S&P/ASX 200 index picked up 3.5 points to reach 4,470, crawling back from a 3.1 percent drop on Monday.

New Zealand's benchmark NZX 50 index fell 0.6 percent to 3,151.7.

The major banks were mixed. National Australia Bank dipped 0.6 percent after its takeover target AXA Asia Pacific said it was leaving the door open to a deal with NAB if the bank could overcome objections from Australia's competition watchdog.

Investors are worried that NAB will overpay for the wealth manager.

Australia and New Zealand Banking Group fell 1.9 percent, while Westpac Banking Corp rose 0.4 percent, recovering from a sharp fall on Monday when its shares started trading without rights to its dividend.

Airline Virgin Blue slumped 6 percent to A$0.465 after a broker downgrade given softening demand in leisure travel.

Transurban Group fell 5.6 percent to A$4.42 after one of its top three shareholders, Ontario Teachers' Pension Plan, sold its 12 percent stake in the group for A$4.44 a share, after the toll road operator rejected its joint buyout offer at A$5.57 a share last week.

Shanghai Swings in Volatile Session

China's key stock index closed 1.36 percent higher after a choppy session, erasing some of Monday's 5 percent tumble, as major global markets in Europe, the United States and Japan stabilized after a rout late last week.

The Shanghai Composite Index end up 34.85 points at 2,595.73, after dropping to 2,529.6 points at one stage.

The key index posted its biggest one-day percentage drop in more than eight months on Monday.

Taiwan stocks fell 0.18 percent, hurt by losses in memory chip and LCD shares after big
Korean rival Samsung Electronics announced a record capital spending plan that could squeeze smaller firms' profits.

However, investors sought bargains in stocks such as TSMC and HTC, companieswith better earnings prospects this year.

Hong Kong's Hang Seng Index rose 1 percent in afternoon trade.

Hong Kong-listed ZTE Corp rose 2.9 percent on news China's No.2 telecommunications equipment maker expected revenue to grow by about 30 percent over the next few years, fuelled by the rapid rise of its cell phone unit.

China Telecom gained 2 percent. The smallest of China's telecom trio will offer Research in Motion's BlackBerry handsets running on its EVDO 3G network in 16 Chinese provinces to corporate clients later this month in an attempt to catch up in the smartphone market.

Europe-focused fashion retailer Esprit rose 0.9 percent, rebounding from a 16 percent drop in the last three sessions. The stock fell to its lowest in more than eight months on Monday on concerns that sharp cuts in government spending in Europe will slow growth in the area.

In Southeast Asia, markets in Singapore and Malaysia mirrored losses in the region. The STI was little changed while the KLCI fell 0.4 percent.