Asia stocks were down Tuesday in thin end-of-year trading, following a subdued lead from the US as investors took profits.
Wall Street on Monday had its worst day in nearly a month, falling from record highs after the extended rally of recent days.
Hong Kong ended a half-day of trading almost 0.5 percent down, although the bourse rallied 7.1 percent overall in December, according to Bloomberg.
Shanghai was marginally down, Taipei was also off and Sydney shed almost two percent.
Jakarta, Tokyo, Manila, Seoul and Bangkok were all closed for a public holiday.
"While market volumes are predictably light, investors continue to strike a year-end cautionary tone as December optimism is gradually giving way to 2020's uncertainty," Stephen Innes, chief Asia market strategist at AxiTrader, said in a note.
Asian investors were also watching for key policy announcements early in the New Year.
North Korean leader Kim Jong Un is set to give his New Year's speech on Wednesday, with all eyes on nuclear-armed Pyongyang's threat of a "new way" after its end-of-year deadline for sanctions relief from the US, analysts said.
China's Xi Jinping is also scheduled to give a New Year's address.
In China, the closely watched Purchasing Managers' Index (PMI), a gauge of activity in the country's factories, was at 50.2 in December, according to official data published Tuesday.
The reading -- slightly above the 50-point mark that separates growth and contraction -- beat a forecast of 50.1 by analysts surveyed by Bloomberg, comes amid a thaw in the US-China trade spat.
Reports on Monday said the US and China would shortly sign a partial trade deal, with White House economic aide Peter Navarro telling Fox News the signing could occur "within a week or two".
"The P1 deal is still 'skinny' relative to a full trade de-escalation scenario," cautioned AxiTrader's Innes.
"Investors will then press to consider the P2 risks, after all -- how much more progress can be realistically expected ahead of the US elections next year?"
Oil markets were largely unchanged, despite reports Iran had seized a vessel suspected of smuggling fuel near the Strait of Hormuz -- a chokepoint for a third of the world's seaborne oil.
Traders were also waiting for the release of US crude production data later Tuesday.
- Key figures around 0430 GMT -
Hong Kong - Hang Seng: DOWN 0.46 percent at 28,189.75 (close)
Shanghai - Composite: DOWN 0.04 percent at 3,038.93
Pound/dollar: DOWN at $1.3122 from $1.3127
Euro/pound: UP at 85.385 pence from 85.356 pence
Euro/dollar: DOWN at $1.1203 from $1.1204
Dollar/yen: UP at 108.70 yen from 108.66 yen
Brent Crude: UP 0.4 percent at $68.44 per barrel
West Texas Intermediate: DOWN 0.1 percent at $61.63 per barrel
New York - Dow: DOWN 0.6 percent at 28,462.14 (close)
New York - Nasdaq: DOWN 0.7 percent at 8,945.99 (close)
New York - S&P 500: DOWN 0.6 percent at 3,221.29 (close)