China's official PMI fell short of estimates in January because of weak demand and efforts to reduce overcapacity, increasing concern that the nation's manufacturing faces more challenges this year. The Shanghai equity index slumped last month by the most since October 2008 amid anxiety slowing growth and yuan volatility will spur capital outflows.
The PMI data is "still showing that the weakness in China's economy is continuing," John Teja, a director at PT Ciptadana Sekuritas, said from Jakarta.
"I would recommend investors wait and see if all the stimulus from various central bankers is having any impact at all and look for more evidence of recovery in the first quarter numbers, before committing any investment in emerging markets."
The MSCI Emerging Markets Index added less than 0.1 percent in Hong Kong, with energy and consumer- discretionary shares declining to counter gains for health-care companies. It has fallen 6.5 percent this year and is valued at 11 times of its 12-month estimated earnings, data compiled by Bloomberg show. The MSCI World Index of developed-nation equities has slid 5.8 percent in 2016 and trades at a multiple of 15.2.
PetroChina lost 3.1 percent, pacing losses for a gauge of emerging-nation energy companies. China Life Insurance Co., the nation's largest insurer, slumped to a two-month low after saying its 2015 net income may have risen less than analysts estimated. The Hang Seng China Enterprises Index of mainland stocks listed in Hong Kong fell 1.6 percent.
True Corp. slumped 8.5 percent, the biggest decliner on the developing-nations gauge, after Thailand's third-largest mobile phone operator announced a plan to raise 60 billion baht (US$1.7 billion) by selling new shares in a rights offering.
The benchmark equity gauges in Thailand, Indonesia and the Philippines fell at least 0.3 percent, while India's S&P BSE Sensex climbed 0.3 percent before the nation's central bank decides on interest rates Tuesday. Malaysian stock markets were closed for a public holiday.
The yuan traded in Hong Kong fell 0.14 percent, the most in a week, after China's official PMI contracted for a record sixth month. The won weakened 0.1 percent after data showed the South Korea's exports shrank the most since August 2009 and the yen's slide after the Bank of Japan's interest-rate move worsened the outlook for exporters.
The Bank of Japan's surprise move on Friday in adopting a negative interest-rate strategy to revive lending added to confidence that major central banks remain supportive of growth.
A Bloomberg gauge of 20 developing-nation currencies was little changed, after losing 1.5 percent in January.
Indonesia's rupiah strengthened 1.4 percent, the most among emerging-market currencies, on speculation local assets will lure more inflows. The nation's local-currency sovereign bonds have already attracted $1.3 billion of inflows this month, as the central bank cut its policy rate for the first time in almost a year on Jan. 14.
China's 14-day repurchase rate fell to the lowest level since Jan. 20, before paring the decline. The People's Bank of China injected 10 billion yuan ($1.5 billion) into the banking system using reverse-repurchase agreements on Monday, after using the contracts to inject a net 1.235 trillion yuan in January, the most on record.
The yields on South Korean bonds fell to record lows after exports data weakened, with the three-year yield falling as low as 1.53 percent.
"The rates market is increasingly pricing in the chance of a Bank of Korea cut," Societe Generale SA's strategists Jason Daw and Frances Cheung wrote in a report on Monday. The central bank held its policy rate unchanged at 1.5 percent.
New Zealand shares rose, led by Kathmandu Holdings after the retailer reported stronger first-half sales on improved margins. The S&P/NZX 50 Index increased 4.28 points, or 0.1 percent, to 6174.5.
