Asian stocks turned mixed late Tuesday as negative impact from the weaker-than-expected China's HSBC flash manufacturing purchasing managers' index (PMI) subsided.
The preliminary survey of the mainland's mammoth factory sector for March surprisingly fell to 49.2, marking an 11-month low, and serving up fresh worries over China's growth momentum. Last month, the final HSBC/Markit PMI climbed to 50.7 – the strongest level since July – while the country's official survey remained a whisker below the 50-point level, which separates growth from contraction, at 49.9.
An unimpressive lead from Wall Street also damped sentiment; U.S. stocks edged lower as investors looked ahead to a light week of economic reports amid fluctuations in the greenback.
The Dow Jones Industrial Average and S&P 500 turned negative at the close, down 0.1 and 0.2 percent each, to trade just below all-time highs. The tech-heavy Nasdaq sagged 0.3 percent, but held above the 5,000 mark.
Shanghai Comp up 0.1%
After plummeting over 1 percent in the morning session due to a lower-than-expected flash PMI reading, China's Shanghai Composite eked out a modest gain to extend its winning streak to the tenth consecutive session.
Blue-chip developers such as China Merchants Property and Poly Real Estate led declines with a more than 3 percent slump each. Meanwhile, brokerages such as Haitong Securities and Founder Securities sold off more than 2 percent, respectively, while the country's biggest securities firm Citic Securities tanked 2.6 percent despite seeing its profits last year double.
Anhui Conch Cement also overlooked positive news of a 17.2 percent on-year rise in 2014 net profit. Its shares closed down 2.7 percent Tuesday.
Nikkei drops 0.2%
Among top losers, GS Yuasa tumbled 3.1 percent after reducing its earnings forecast.
Sharp was up for a second straight session following news that Taiwan's Hon Hai Precision Industry is considering joining efforts to help rescue it. Shares of the electronics maker added 2 percent. Eisai, surged 9.4 percent after rocketing 20 percent in the previous session on hopes that its drug can treat Alzheimer's disease.
ASX adds 0.2%
Despite the weak manufacturing survey being a "momentum killer," Australia's S&P ASX 200 index managed to hold above the flatline as the resources sector, which drew strength from a stabilization in commodity prices overnight, provided some support.
"Buying interest gradually built over the morning session with the index peaking around 5,980. However, the below expectations flash Chinese PMI number was a momentum killer," said analysts from Patersons Securities. "The index was kept in the black, just by modest gains in eight of its 10 industrial sectors."
Market bellwether BHP Billiton gained 0.7 percent, while Fortescue Metals rose 1.5 percent. Coal miner Whitehaven Coal leaped 2.4 percent to A$1.490 as Morgan Stanley raised its price target for the share by 7.4 percent to A$1.88. A stronger finish in gold prices also lifted gold producers; Newcrest Mining and Evolution Mining rose 2.6 and 3.1 percent each.
Woodside Petroleum was one of the underperformers, drifting 0.3 percent lower, following news that it is laying off 300 workers.
Meanwhile, national carrier Qantas slumped 1.6 percent after the country's competition watchdog proposed to deny a prior authorization for the Australian air carrier to coordinate services with China Eastern Airlines.
Kospi adds 0.2%
South Korea's Kospi index edged up in the final hour of trade, but dismal performances in the automobile and banking sectors limited advances. Index heavyweight Hyundai Motor and its smaller affiliate Kia Motors lost 2.2 and 1.3 percent, respectively.
KB Financial Group fell 2.5 percent, while Hana Financial and Woori Bank sagged 2.2 and 1.8 percent each.
Among the top performers, Samsung Group's hotel and retail unit Hotel Shilla rose 1.8 percent after announcing plans to acquire a 44 percent stake in U.S. in-flight duty free retailer DFASS for $105 million.
Rest of Asia
Taiwan's Pegatron retreated nearly 5 percent despite delivering a 53 percent rise in 2014 net profit. Fellow iPhone manufacturer Hon Hai Precision Industry pared gains to closed down 0.2 percent on news that it is partnering with China's internet behemoth Tencent to venture into the web-connected electric car market.
Singapore-listed commodities trader Noble Group slumped 0.52 percent as the war of words between the firm and Iceberg Research continues.
— CNBC's Evelyn Cheng contributed to this report