06:41 AM EDT, 09/03/2024 (MT Newswires) -- Asian stock markets sagged on Tuesday as traders considered earnings reports, China-Japan trade tensions, and the outlook for US Federal Reserve rate cuts.

In rising conflicts, China over the weekend threatened economic consequences if Japan further tightened restrictions on sales and servicing of chipmaking equipment sold to Chinese enterprises, according to media reports.

Hong Kong, Shanghai, and Tokyo finished in the red, as did other regional exchanges.

In Japan, the Nikkei 225 opened higher, waffled, and finished marginally off as a softer yen undergirded export issues. However, the upside was capped by outlooks that the US central bank will soon ease monetary policy, resulting in a stronger yen.

The benchmark Nikkei 225 fell 14.56 to 38,686.31, as gaining issues outnumbered losers 136 to 87.

Leading the upside was bank Resona, gaining 6.6%, while electrical equipment maker Fujikura declined 3.7.

In economic news, the headline Japan Manufacturing Purchasing Managers Index (PMI) logged at 49.8 in August, up from 49.1 in July, and only modestly below the 50-marker that separates growth from contraction, said S&P Global.

In Hong Kong, the Hang Seng Index finished off 0.2% on trade tensions and soft bank-sector earnings reports.

The broad gauge Hang Seng fell 40.48 to 17,651.49 as losing issues outnumbered gainers 45 to 33. The Hang Seng TECH Index gained 0.3% on the day, while the Mainland Properties Index rose 0.9%.

Leading the upside was Xinyi Solar, gaining 3.5%, while China Merchants Bank brought up the rear, falling 3.1%.

On the mainland, the Shanghai Composite fell 0.3% to 2,802.98.

In economic news, the headline China seasonally adjusted manufacturing PMI rose to 50.4 in August from 49.8 in July, reported S&P Global on Monday.

On the other regional exchanges, the S. Korean KOSPI fell 0.6%; the Taiwan TWSE declined 0.6%; the Australian ASX 200 declined 0.1%; the Singapore Straits Times Index rose 0.5%, and the Thai Set inclined 0.8%. In late trading in Mumbai, the Sensex was steady.

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