Asia stocks turn lower; Nikkei ends down 0.3%

Investing.com - Asian stock markets retreated from earlier highs to turn lower during late Asian trade on Tuesday, with shares in Japan and Australia coming off the highest level since 2008 as investors turned cautious over recent gains.

During late Asian trade, Hong Kong's Hang Seng Index fell 0.7%, Australia’s ASX/200 Index ended 0.6% lower, while Japan’s Nikkei 225 Index closed down 0.3%.

Global stock markets have rallied sharply in recent weeks, with the Dow Jones Industrial Average moving further into unchartered territory Monday, with central-bank policy helping spur a shift into riskier assets, such as equities.

But concerns over the global economic outlook remained after Chinese data released over the weekend showed consumer inflation accelerated sharply in February, while industrial production slowed to the lowest level since October 2009.

Higher-than-expected inflation could raise concerns that Beijing will start monetary tightening.

Fears over a possible economic impact from the U.S. sequestration spending cuts, and last month's election deadlock in Italy also was likely to remain in focus.

In Tokyo, the Nikkei came off the highest level since September 2008, as investors booked profits on recent performers amid concerns the market was set for a near-term correction.

The benchmark index has rallied nearly 19% since the start of the year, as expectations for more aggressive monetary stimulus from the Bank of Japan under new Prime Minister Shinzo Abe underpinned sentiment.

Earlier Tuesday, the minutes of the Bank of Japan’s February meeting showed that some policymakers said bond purchases could be considered as an option for further monetary easing.

Automakers Mazda and Toyota lost 2.5% and 0.8% respectively, while Sony declined 2%. Japanese exporters have been amongst the most notable gainers in recent weeks, as ongoing weakness in the yen boosted the outlook for export earnings.

Meanwhile, in Australia, the benchmark ASX/200 Index turned lower after touching the highest level since September 2008, as miners were broadly higher.

BHP Billiton and Rio Tinto lost 0.5% and 1.8% respectively, while iron ore maker Fortescue Metals Group slumped 3%. Australian commodity producers are heavily reliant on Chinese demand for raw materials.

Elsewhere, in Hong Kong, the Hang Seng edged lower, tracking losses in mainland China, as market players remained concerned over the economic outlook for the world’s second largest economy.

The China financial sector were among the biggest drags on the index after China’s banking regulator launched a probe of wealth-management products.

Insurance giants China Life Insurance Group and Ping an Insurance Group dropped 2.9% and 2% respectively, while Industrial and Commercial Bank of China and China Construction Bank lost 0.6% and 0.9%.

Looking ahead, European stock market futures pointed to a lower open, as concerns over the economic outlook for the region and worries over ongoing political uncertainty in Italy weighed on sentiment.

The EURO STOXX 50 futures pointed to a loss of 0.35% at the open, France’s CAC 40 futures dipped 0.35%, London’s FTSE 100 futures eased down 0.2%, while Germany's DAX futures pointed to a loss of 0.2% at the open.