Asian markets in retreat as investors digest Chinese and Australian data

Asian markets fell for a second consecutive session on Wednesday, after stocks on Wall Street dropped from record-highs and investors digested regional data.

On Wall Street on Tuesday, the S&P 500 dropped 0.5% to 2,107, retreating from fresh record highs. European markets booked losses too as traders prepared for an onslaught of key events later this week with the European Central Bank’s policy meeting on Thursday and the US jobs report due on Friday.

In China, share markets were mixed with the Shanghai index up a tad higher at 0.2% but Hong Kong's Hang Seng Index falling by 0.3%.

Attention was on data out of China’s services sector which showed growth at a modest pace in February, as new orders rose at their quickest pace in three months.

According to data compiled by HSBC and Markit, China’s purchasing managers’ index (PMI) for the services sector rose to 52, from the six-month low of 51.8 in January. A reading above 50 reflects growth while below 50 indicates contraction.

A sub-index for new orders rose to 52.2 in February from 51.2 in January and the sub-index measuring new business also rose.

HSBC/Markit also released data for the composite Chinese PMI for February, combining the results for both manufacturing and services, which rose to 51.8 in February from 51 in January, marking a five month high.

The data showed the pace of growth was softer than the official surveys from China over the weekend which showed growth in the sector picked up to 53.9 in February from January's 53.7, which the National Bureau of Statistics attributed to strong holiday spending during the Chinese New Year.

China’s services sector accounts for around 48% of the country’s GDP and relies less on foreign demand, helping it weather the downturn that the industrial and manufacturing sectors have felt in the past 18 months.

Market participants are hoping that the latest efforts by the central bank of China to embark on additional stimulus to support growth can filter through into the real economy, helping the services sector regain strength.

Chinese policy-makers this week are set to announce a 2015 growth target at the opening of the annual session of China's legislature.

Meanwhile, Australia's S&P/ASX 200 fell 0.5% at 5,901 after economic data showed the country grew at just 0.5% in the last quarter of 2014, below the consensus estimate at 0.6%, but up from an upwardly revised 0.4% in the prior quarter.

The year-to-year rate was 2.5%, the slowest pace in four quarters.

The disappointing GDP data came a day after the Reserve Bank of Australia surprised the market and held steady on policies, though did go as far as hinting over the prospects of more rate cuts in coming quarters.

In South Korea, the Kospi Composite was flat while in Tokyo, the Nikkei 225 fell 0.8%, a second straight fall after a string of fresh 15-year highs.