Australian stocks were lower early today after below-view Chinese manufacturing data, while Japanese shares took pause at the end of a violent week of trading.
Chinese manufacturing data was the main data point today, with the official purchasing managers index coming out at 50.1, compared with 50.4 in January, and undershooting economists' expectations of a rise to 50.5.
A score above 50 indicates an expansion in manufacturing activity.
The official data will be followed by the final reading on HSBC's competing index, due out later in the session. The preliminary reading released earlier in the week pointed to a sharp deceleration in factory activity in February, with the measure coming out at 50.4 compared with a final score of 52.3 in January.
Australia's S&P/ASX 200 retreated 0.4 per cent, with major miners under-performing the broader market:
Rio Tinto fell 1.5 per cent and Fortescue Metals Group was 3.4 per cent lower.
The mood in the market was cautious after a pullback in HSBC's preliminary China PMI data earlier this week suggested China's manufacturing expansion was slowing.
Investors were also wary about the effect of spending cuts on the US economy, after massive gains in shares in the past eight months.
The market slipped today after surging 1.3 per cent yesterday to its highest point since September 2008.
The index is up 28 per cent since June, and 9 per cent so far this year.
On Wall St, the S&P 500 closed down 0.1 per cent after a 0.6 per cent intraday rise. Copper, oil and gold fell 0.7 per cent to 1.1 per cent as the US dollar rose on the back of stronger-than-expected US manufacturing data.
"Portfolio rebalancing contributed to Australian share market strength yesterday and we are now seeing some caution before the US sequester, although a last-minute deal can't be ruled out," said IG market strategist Stan Shamu.
President Barack Obama and congressional leaders are scheduled to meet today.
Westfield Retail Trust shares fell 3.5 per cent after the Lowy family sold its stake in the real estate investment trust for $664 million yesterday.
Major banks were holding up relatively well, helped by upgrades on Commonwealth Bank of Australia, ANZ Bank, and National Australia Bank from J.P. Morgan.
