Shares in Asia were largely in negative territory on Tuesday following declines in the US and as falling iron ore prices continued to hurt mining companies.

In Australia, the S&P/ASX 200 closed down 0.95% at 5,226.40.

Analysts said iron ore prices were continuing to move towards the decade low reached earlier this year.

The commodity is Australia’s biggest export and was trading at $44.20 a tonne in China on Monday.

Independent economist and commodities specialist Andy Xie has predicted that iron ore prices will fall below $40 a tonne before the end of the year.

He said prices could even sink as low as $30 for much of next year as demand from China continues to decline.

Three of the biggest iron ore producers recorded falls in their Sydney-listed shares. BHP Billiton closed down 1.8%, Rio Tinto fell 1.5%, while Fortescue Metals was the biggest loser, sinking 3.2%.

Japan’s Nikkei index spent much of the day flat but made gains late in the day to close up 0.23% at 19,924.89 points.

Shares in the country’s troubled electronics maker Sharp surged more than 35% at one point on reports its lenders may waive some of its debts.

Without citing sources, Kyodo News said a state-backed fund may invest in Sharp if Japanese lenders agreed to write off an unspecified amount of its debt.

Investors seem to shrug off fresh numbers released earlier on Tuesday that showed Japan’s manufacturing activity expanded in November as new orders and output increased.

The Markit/Nikkei Japan Flash Manufacturing Purchasing Managers Index (PMI) rose from 52.4 in October to 52.8 in November. A reading above 50 indicates expansion.

The PMI figure was the highest it had been since March last year – ahead of the introduction of the country’s sales tax.

Marcel Thieliant from Capital Economics said the reading suggested Japan’s economy had returned to growth this quarter.

“Today’s survey confirms that economic activity is on the mend. But with large amounts of spare capacity dampening price pressures, we still think that the Bank of Japan may have to step up the pace of easing in coming months,” he added.

In China, losses were extended for much of the day after new rules for the mainland’s stock exchanges aimed at limiting leveraged bets on the market and reducing speculative behaviour were introduced on Monday.

Investors were concerned over available liquidity ahead of the restart of initial public offerings.

The Shanghai Composite index was down as much as 1% but recovered ground later to stand 0.16% higher at 3,616.11 in afternoon trade.

Hong Kong’s Hang Seng index was down 0.44% at 22,568.23.

South Korea’s Kospi index closed up 0.63% at 2,016.29

Source: Asia shares largely down on Tuesday hurt by iron ore – BBC News