Asian stocks slipped into negative territory Monday as worries related to rising inflation and interest rates overweighed early enthusiasm that the U.S. government will rescue mortgage giants Fannie Mae and Freddie Mac.
In Tokyo, the Nikkei 225 sidled down by 0.2%, to 13,010.16; Hong Kong's Hang Seng index broke a three-day winning streak, losing 0.8%, to 22,014.46
On the economic front, the Japan's Cabinet Office has retained its overall economic assessment in July, according to the Monthly Economic Report. However, the report stated that the economic recovery appeared to be pausing.
Meanwhile, the Bank of Japan's monetary policy committee began its two-day meeting today. The central bank is widely expected to hold its key interest rate at 0.5% when it announces its decision on Tuesday.
Steel makers gained on short covering following recent losses. Nippon Steel gained 3.6%, Sumitomo Metal Industries rose 2.9% and JFE Holdings surged 5.6%.
In the financial sector, stocks erased or trimmed early gains. Mizuho Financial Group added 0.6%, but Sumitomo Mitsui Financial slipped 0.1% and Mitsubishi UFJ Financial dropped 1.4%. Top brokerage Nomura Holdings edged up 0.3% and general leasing company Orix jumped 3.4%. Among insurers, Mitsui Sumitomo Insurance declined 1.4%, but Sompo Japan Insurance advanced 1.5%.
Nissan Motor shed 2.4% on a report over the weekend that the automaker and its Chinese partner Dongfeng Motor are planning to build an engine factory in central China. Bridgestone lost 1.0% following a report that the company is expected to post a 26% fall in operating profit in 2008.
In China, the Shanghai Composite index was propelled up by 0.8%, to 2,878.26.
Elsewhere:
Taiwan's Taiex weighted index sank by 1.2%, to 7,156.96.
Singapore's Straits Times index moved to the downside by 0.8%, to 2,904.12.
India's Bombay Stock Exchange's Sensex index declined by 1.3%, to 13,296.48.
Australia's S&P/ASX 200 gave up 1.2%.
New Zealand's NZX 50 index lost 1.3%.
with files from other wire services
