Asian stocks ended mixed on Tuesday following the release Chinese factory data but trade was quiet with Japan shut for the Autumnal Equinox holiday.
HSBC/Markit's preliminary gauge of Chinese factory activity for September rose to 50.5 from August's 50.2 final reading, beating expectations for a figure of 50. However, the optimism was offset by factory employment, which slumped to a five-and-a-half year low.
"With rumors that China is conceding defeat and will officially lower its growth target, along with speculation there won't be further stimulus, it was crucial for today's reading to show some positive signs. After last week's alarming property figures, concerns have certainly deepened and this will perhaps test officials' resolve and their commitment to only issuing targeted stimulus," said Stan Shamu, market strategist at IG.
Sentiment was also cautious after the U.S. and some Arab allies announced late on Monday that they carried out airstrikes against Islamic State militants in Syria for the first time.
China markets higher
Mainland shares rallied 0.9 percent, rebounding following Monday's 2 percent loss, as investors cheered the PMI report.
Real-estate developers jumped on local media reports that China's top four state banks plan to ease rules on mortgage lending. China Merchants Property rose 2 percent while Poly Real Estate and China Vanke added more than 1 percent each.
Meanwhile, Hong Kong's benchmark Hang Seng Index posted modest losses following a choppy session.
ASX up 1%
Australian shares erased losses after dropping to their lowest level since March 27 earlier in the session. Meanwhile, the Australian dollar rose above 89 U.S. cents, bouncing off Monday's seven-month low of $0.8854.
Kospi 0.5% lower
South Korea's benchmark Kospi index was unable to track Asia-wide gains, extending losses into a second session.
Nifty slips 1.5%
Indian shares closed lower due to large declines in blue chip stocks and ahead of the expiry of monthly derivatives contracts on Thursday.