HONG KONG (MarketWatch)--Asian stock markets ended mostly lower Wednesday, with the Shanghai benchmark suffering this year's worst percentage loss so far, led by mining and metal stocks.
On mainland bourses, the Shanghai Composite tumbled 2.7%, its worst loss since late November 2011, while the Shenzhen Composite slumped 4.1%. Hong Kong's Hang Seng Index lost 0.8%.
"State enterprises' combined earnings are going down. This is relatively new, so sellers are using that as an excuse to drag down the market," said Steve Cheng, associate director at Shenyin Wanguo. The selling might also be an effort by institutional investors to lock in profits before the end of the first quarter, he added.
Elsewhere, Japan's Nikkei Stock Average fell 0.7% and South Korea's Kospi lost 0.4%, giving back some of gains recorded the previous day on hopes U.S. monetary policy will remain accommodative.
Going the other direction, Australia's S&P/ASX 200 index rose 1.0% to 4,343.50 - a closing level not seen since Nov. 9. Taiwan's Taiex added 0.1%.
The losses on mainland bourses came a day after data from the National Bureau of Statistics showed a 5.2% drop in profits for China's largest industrial groups during the first two months of the year.
Mining and metal stocks were hit hard. Yanzhou Coal Mining fell 5.6% and Jiangxi Copper fell 5.5% in Shanghai, while Yunnan Tin shed 7.7% and Hebei Iron & Steel declined 4.2% in Shenzhen.
The losses also weighed in Hong Kong, where Jiangxi lost 2.4% and Aluminum Corp. of China gave up 2.1%. Jiangxi's losses came after it reported a 33% increase in annual profit, but missed analyst forecasts.
Also weighed by weak earnings reports, Gome Electrical Appliances Holding slumped 21.2% after the appliance retailer said Tuesday that higher costs limited its 2011 net-profit rise to just over 6.0%, also falling short of expectations. The performance earned a stock downgrade to underperform from outperform from Macquarie.
Merchandise sourcing and supplying firm Li & Fung dropped 5.2% after raising $501 million via a share placement.
In Tokyo, shares of Sharp Corp. soared by the day's 16.3% limit following reports that Hon Hai Precision Industry Co. is buying a 10% stake in the Japanese firm for 66.91 billion yen ($806 million).
"The Hon Hai Group's roster of customers should be a strong asset for Sharp," analysts at Nomura Securities wrote in a report. "We think Hon Hai would like to leverage Sharp's strength in large-size panels to bid Apple Inc.'s iTV project."
Shares of Hon Hai jumped 4.6% in Taipei, also aided by better-than-expected quarterly results announced Tuesday, to support the broader market.
South Korean liquid crystal display makers declined following the reports. Samsung Electronics dropped 0.7%, while LG Display fell 4.9%.
Recent yen weakness also helped lift other exporters, with Toyota Motor rising 1.8% and Nissan Motor gaining 1%.
Sony Corp. gained 2.5% after a Nikkei business news report that its money-losing television business would be placed under the direct control of the company's new chief executive officer.
In Sydney, gold miner Newcrest Mining rose 2.9% and Fortescue Metals Group added 2.1%.
Banks were also higher, with Westpac up 1.0% and National Australia Bank 1.1% higher.
Peter Esho at City Index in Sydney said that the Australian benchmark index closed over the key 4,300 level on Tuesday, and the market was possibly experiencing some technical buying Wednesday.
"We're seeing a lot of beaten-down names doing well today," he said.
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