Asian shares fell for a second consecutive session on Tuesday as some of the confidence that fueled a recent rally was dampened by reports that highlighted the weakness in the global economy.
China's exports fell a worse-than-expected 22.6 percent in April from a year earlier, while imports fell 23.0 percent, the official Xinhua news agency said on Tuesday.
The trade data dampened some of the hopes for a turnaround in the global economy that had fueled a surge in equity markets from their 2009 lows in early March. The dollar and yen on Tuesday were steady a day after gaining on safe-haven demand.
Exports are still falling, and the future of the world economy remains uncertain. It's really hard to be optimistic about China's trade prospects, said Qi Jingmei, an economist with the State Information Center in Beijing.
The fall in imports shows that domestic companies are not willing to invest. We need to observe more before we can conclude that there's a rebound in the real economy.
The MSCI index of Asia-Pacific stocks outside Japan <.MIAPJ0000PUS> lost 1.1 percent after falling 0.6 percent on Monday, reversing some of the gains that had sent the gauge up some 50 percent since the yearly low hit in early March.
The debate about the outlook for the global economy is being confounded by the mixed nature of recent reports.
Optimists pointed to a survey from the Organization for Economic Co-Operation and Development on Monday that noted the pace of the decline in the world's major industrialized and emerging economies was easing.
Leading central bankers, including ECB President Jean-Claude Trichet, on Monday also suggested a turning of the corner for the global economy.
The South Korean central bank forecast on Tuesday that the economy would likely post mild growth in the coming months amid signs the economic slowdown had clearly abated, after keeping interest rates on hold as widely expected.
However, other reports have not been too rosy. Industrial production in France and Italy dropped more sharply than expected in March, data showed on Monday, in a bad omen for the eurozone economy.
Reports from China itself were also mixed, with the country reporting on Tuesday that urban fixed-asset investment rose slightly more than expected, helping Shanghai's <.SSEC> main index post a 0.2 percent gain.
Shares in Hong Kong <.HSI> also gained led by a 2.3 percent gain in HSBC <0005.HK>
With the exception of HSBC, financial shares such as Mitsubishi UFJ Financial Group <8306.T> were among the major decliners after a recent rally that was tracking strong gains in U.S. banking shares.
Japan's Nikkei average <.N225> lost 1.4 percent, with markets in Australia <.AXJO> and Taiwan <.TWII> posting declines of 1-2 percent.
Clearly we've had a very big run in the market and any whiff of a turnaround will send a lot of profit-takers in, said Robert Hook, portfolio manager with S.G. Hiscock & Co, in Australia.
Some of this uncertainty was reflected by the safe-haven demand seen for the dollar and yen on Tuesday.
The dollar index, a gauge for the greenback's performance against six other major currencies, was little changed at 82.69 <.DXY>, having rebounded throughout the previous session after at one point touching a four-month low of 82.292.
Oil futures retreated 20 cents to $58.31 a barrel after hitting a near six-month high of $58.75 on Friday.