Asian Stock Market News - Fed, BOJ Awaited

Asian shares consolidate gains after rally; Fed, BOJ awaited

Japan's Nikkei

Asian shares fell on Tuesday after a four-week rally ran out of steam as investors took cover ahead of central bank meetings in the United States and Japan later in the week, while disappointing U.S. home sales weighed on the dollar.

European markets were set to open flat to lower, with earnings from major companies such as Deutsche Bank < DBKGn.DE> and Novartis (NOVN.VX) in focus.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS slipped 0.7 percent.

China's main indexes .CSI300.SSEC slid more than 2 percent at one point, pressured by concerns about weak bank profits and growing bad loans, but pared losses by early afternoon. [.SS]

Japan's Nikkei .N225 eased 0.8 percent, though it remained near a two-month high.

Even as investors moved to the sidelines after a rally that has seen regional stocks rise more than 12 percent in a month, market strategists are becoming more optimistic over the outlook for equity markets in the near term.

Risk sentiment has been supported by China's rate cut last week -- its sixth in less than a year -- and the prospect of more easing from the European Central Bank in December.

There has been speculation the Bank of Japan might expand its asset buying campaign at a policy meeting on Friday, though recent reports make it less likely.

Dealers said there was no obvious news behind the Asian stock weakness on Tuesday, though some noted tensions in South China Sea as the U.S. Navy sent a destroyer close to artificial islands built by China, drawing an angry rebuke from Beijing.

Still, some players were likely squaring positions ahead of the U.S. Federal Reserve meeting on Tuesday and Wednesday.