Mainland Chinese shares stumbled, leading most major Asian markets lower, as investors expressed disappointment that monetary policy in the world's second-largest economy hasn't been loosened.
"There are expectations of an interest-rate cut in China and yet nothing is coming at the moment," said Tom Kaan, director of equity sales at Louis Capital Markets in Hong Kong. "It's very difficult to read the official line, and that is what is putting people off trading mainland China stocks."
Australian shares fell after the Reserve Bank of Australia likewise disappointed investors, leaving its policy rate unchanged at 4.25% amid widespread expectations of a 0.25-percentage-point cut. In Japan, weak earnings reports weighed on spirits.
Indian shares fell, snapping a five-session winning streak after the government cut its economic growth forecast for a second time this fiscal year to 6.9%, the weakest in three years.
A lack of clear progress in debt-restructuring talks in Greece further bruised sentiment in Asia. Concerns that the risk of a Greek default is rising drained investor confidence and pushed U.S. markets lower on Monday. Greek political leaders have yet to agree on austerity measures required to secure the next round of bailout funds.
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"Markets have been hit a little by the Greek bailout negotiations," said Naomi Fink, equity strategist at Jefferies Japan. "A lot of the recent rally has been on hopes of better overseas demand."
China's Shanghai Composite dropped 1.7% to 2291.90, its first loss in four sessions. In Sydney, the market turned after the RBA decision, and the S&P/ASX 200 finished 0.5% lower at 4274.2. In Mumbai, the Sensex fell 0.5% to 17622.45. Both Japan's Nikkei Stock Average and Hong Kong's Hang Seng Index eased 0.1%, to 8917.52 and 20699.19, respectively.
Bucking the broad trend, South Korea's Kospi rose 0.4% to 1981.59 and Taiwan's Taiex added 0.3% to 7707.44.
Tight liquidity conditions in China, including the continued high reserve requirements for banks, pressured mainland stocks. Air China dropped 4.1%, Anhui Conch Cement slid 3.2% and Harbin Pharmaceutical Group fell 3.1%; the trio were among the notable decliners in Shanghai, where losses where widespread.
In Hong Kong, Chinese property, coal-mining and banking stocks lost ground, with Agile Property Holdings slumping 4.7%, China Coal Energy dropping 2% and Bank of China falling 1.2%.
In Sydney, miners were among those turning south after the RBA decision; Rio Tinto fell 1.8% and Fortescue Metals Group shed 1.9%.
National Australia Bank sank 4% and investment bank Macquarie Group gave up 0.8% after issuing updates that fell short of expectations. NAB missed analysts' expectations with a 7.7% rise in first-quarter cash earnings, and said it will undertake a strategic review of its U.K. operations, which face difficult operating conditions. Macquarie, citing tough trading conditions, forecast a worse-than-expected 25% decline in full-year profit.
Cochlear surged 7.6% as underlying first-half earnings beat expectations—though provision costs relating to a recall led to a first-half loss of A$20.4 million ($21.9 million).
In Tokyo, underwhelming earnings reports put some stocks under pressure. Suzuki Motor fell 1.8% after posting a profit slide of just under 5% for the April-December period. Dainippon Screen Manufacturing skidded 7.1% after lowering its outlook for full-year net profit.
Shipping stocks rose to support the broader market after last year's hefty losses. Mitsui O.S.K . Lines rose 2.2% and Nippon Yusen K.K . added 2.3%.
In Seoul, shares of Samsung Electronics added 1.8% and Hyundai Heavy Industries climbed 0.7% on foreign buying interest, providing the broader market with support.
Bharti Airtel fell 2.5% in Mumbai ahead of its quarterly results, due Wednesday.
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