Asian shares mostly retreated on Tuesday, tracking a sell-off in offshore equity markets, as a fresh batch of Chinese data added to the uncertainty from a looming interest-rate hike in the U.S.
China's consumer price index (CPI) for October rose 1.3 percent from a year earlier, data from the National Bureau of Statistics (NBS) showed, cooling from 1.6 percent in September and slightly below expectations of a 1.5 percent rise. Meanwhile, the producer price index (PPI) fell 5.9 percent in October, chalking up its 44th straight month of declines after dropping 5.9 percent in the previous month.
Analysts noted that the latest inflation report signal a less-than-stellar picture in the world's second largest economy and the need for additional policy easing measures.
"Much of the hope for China's economic transition rests on continuing strong consumption and services sector growth [thus] it was most concerning to see a drop in consumer goods and food inflation. The lesser weighted components for recreation, education and cultural services also saw noticeable weakening," IG's market strategist Angus Nicholson wrote in a note issued mid-Tuesday.
"This is not good news for a government that targets a floor to growth of 6.5 percent and doubling income by 2020. The People's Bank of China (PBOC), thus, will be under pressure to ease monetary conditions further. We expect the central bank to slash the reserve requirement ratio by another 50 basis points to 17 percent," said Alicia Garcia Herrero, Natixis's chief economist for Asia Pacific.
Overnight, major U.S. averages posted their biggest decline in six weeks, down 1 percent each, as investors pondered a possible U.S. interest-rate hike in December.
According to the CME Group, the probability of a December lift-off rose from about 58 percent to about 70 percent, after the October nonfarm payrolls report — released Friday — showed the U.S. economy added 271,000 jobs.