CANBERA (dpa-AFX) - Asian stocks ended Thursday's session on a muted note as Fed Chairman Jerome Powell dampened hopes of further rate cuts later this year and top American and Chinese negotiators finished talks with little progress toward ending a trade war.
Chinese shares retreated as a private survey showed Chinese factory activity contracted in July and China's central bank kept its main policy rates on hold.
The People's Bank of China refrained from daily open market operations, saying that banking system liquidity was 'reasonably ample'.
The benchmark Shanghai Composite index fell 23.74 points or 0.81 percent to 2,908.77 while Hong Kong's Hang Seng index ended down 212.05 points or 0.76 percent at 27,565.70.
Japanese shares ended little changed with a positive bias as investors awaited manufacturing and employment data from the U.S for additional cues about future rate cuts. The Nikkei average inched up by 19.46 points to 21,540.99, while the broader Topix index closed 0.14 percent higher at 1,567.35.
Exporters ended mixed even as the yen slid to a two-month low against the dollar. Honda Motor rose 0.4 percent and Toyota added 1 percent while Sony shed 0.8 percent and Panasonic lost 1.5 percent.
Takeda Pharmaceutical soared 7.4 percent as it posted strong first quarter results and raised guidance for the full year.
The manufacturing sector in Japan continued to contact, albeit at a slightly slower rate, the latest survey from Jibon revealed with a manufacturing PMI score of 49.4. That's up fractionally from 49.3 in June.
In another development, the Bank of Japan is prepared to take policy responses, if necessary, to prevent various risks from materializing and to achieve inflation target, Deputy Governor Masayoshi Amamiya said.
Australian markets ended modestly lower after the Fed Reserve tamed speculation for a rate easing cycle. The benchmark S&P/ASX 200 index dropped 23.70 points or 0.35 percent to 6,788.90 while the broader All Ordinaries index ended down 24.80 points or 0.36 percent at 6,871.90.
Miners accounted for much of the losses, with Rio Tinto declining 1.1 percent ahead of its first-half results. BHP shed 1.2 percent and Fortescue Metals Group gave up 2.3 percent.
Gold miners Evolution and Newcrest fell around 4 percent as the precious metal hovered near two-week lows in the wake of mixed signals from the Fed on future rate cuts. Resolute Mining slumped 5.4 percent and Northern Star plunged 7.2 percent.
Janus Henderson Group plummeted 12.2 percent after the fund manager said it had suffered about $US9.8 billion ($14.3 billion) worth of outflows in the last quarter.
Mineral Resources rallied 2 percent on news that U.S.-based Albemarle Corp will take a controlling stake in its Wodgina lithium project. Agricultural chemicals company Nufarm rose over 3 percent on fund raising reports.
The manufacturing sector in Australia moved back into expansion territory in July, the latest survey from the Australian Industry Group revealed with a Performance of Manufacturing Index score of 51.3. That's up from 49.4 in June.
Seoul stocks ended lower as relations between Japan and South Korea appear to be at a stalemate over export restrictions. The benchmark Kospi ended down 7.21 points or 0.36 percent at 2,017.34.
South Korea's foreign minister Kang Kyung-wha warned that Seoul would review a bilateral intelligence-sharing pact if Japan removes South Korea from its list of countries with minimum trade restrictions.
Her Japanese counterpart, Taro Kono, insisted South Korea must comply with international law regarding a dispute over Japanese companies' use of wartime labor.
On the data front, South Korea's exports posted a double-digit fall in July, extending their annual fall to an eighth consecutive month, a government report showed.
New Zealand shares recovered from an early slide to end on a flat note. The benchmark S&P/NZX 50 index inched up 3.07 points to 10,860.82. Dairy firm a2 Milk Company declined 1.9 percent after three consecutive sessions of gains.
Overnight, U.S. stocks fell after the Fed lowered interest rates by quarter point, as expected, but Chairman Powell said it's not the beginning of a long series of rate cuts.
The Dow Jones Industrial Average and the tech-heavy Nasdaq Composite lost around 1.2 percent, while the S&P 500 declined 1.1 percent.
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