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Asian markets were broadly lower on Tuesday after data releases showed further signs of weakness in China's manufacturing and real estate sectors.
U.S. futures were higher and oil prices rose more than $1 a barrel. Japan's markets were closed for a holiday.
Hong Kong's Hang Seng Index fell 1.5% to 16,788.55 and the Shanghai Composite Index fell 0.4% to 2,962.28.
Investors sold property developers such as debt-laden China Evergrande, which fell 6%, and LongFor Group Holding, which fell 6.9%. Sino-Ocean Holding fell 4.6%.
China's December survey of the official Purchasing Managers' Index (PMI) fell to 49 for the third straight month, indicating weak demand and underscoring difficult economic conditions in the world's second-largest economy.
In contrast, financial magazine Caixin's private sector survey showed a slight improvement in the manufacturing purchasing managers' index to 50.8, reflecting increased production and new orders. However, it showed that business confidence for 2024 remained subdued.
The latest data also showed that the value of new home sales by China's top 100 developers fell nearly 35% in December compared to a year earlier, despite regulators taking steps to lift restrictions on such transactions.
South Korea's Kospi rose 0.6% to 2,669.81 and Australia's S&P/ASX 200 rose 0.5% to 7,627.80.
Bangkok's SET gained 1.1% while Mumbai's Sensex lost 0.7%.
Stocks on Wall Street fell from near all-time highs on Friday on easing inflation, a robust economy and the prospect of lower interest rates, giving investors a boost.
The S&P 500 slipped 0.3%. The benchmark index still posted a rare ninth straight week of gains and is just 0.6% below its January 2022 all-time high.
The Dow Jones Industrial Average fell 0.1% and the Nasdaq slipped 0.6%.
Last year, gains in the broader market were largely driven by seven stocks: Apple, Microsoft, Alphabet, Amazon, Nvidia, Meta Platforms and Tesla. They accounted for about two-thirds of the gains in the S&P 500, dubbed the “Magnificent 7,” in 2023, according to S&P Dow Jones Indices. Nvidia led the group with a gain of about 239%, driven by the artificial intelligence mania.
Investors are now betting that the Federal Reserve can achieve a “soft landing” in which the economy slows just enough to ease high inflation, but not so much that it falls into recession. The Fed is expected to begin cutting interest rates as early as March and has announced plans to cut its key interest rate by three quarter points this year. This rate is currently between 5.25% and 5.50%, the highest level in two decades.
Lower interest rates could further boost broader market momentum in 2024. Wall Street is forecasting stronger profit growth for companies next year after a largely lackluster 2023 as companies struggled with higher input and labor costs and a shift in consumer spending.
The yield on the 10-year Treasury note, which hit 5% in October, was unchanged from Friday's level of 3.88%.
The two-year Treasury yield, more in line with Fed expectations, fell to 4.25% from 4.28% late Thursday. In October it also exceeded the 5 percent mark.
In other trading, U.S. benchmark crude oil prices rose $1.34 to $72.99 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the international standard, rose $1.54 to $78.58 a barrel.
The US dollar rose to 141.42 Japanese yen from 140.88 yen. The euro fell from $1.1047 to $1.1033.
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