UPDATE: Asian Shares Lower; China's Data Spur Some Selling

SINGAPORE -- Asian share markets were lower Thursday after a night of weakness on Wall Street, and were weighed further by data showing China's economy grew at a slightly slower than expected pace in the third quarter.

Japan's Nikkei 225 was down 1.4% with South Korea's Kospi Composite down 1.3% and Hong Kong's Hang Seng Index 1.2% lower. Taiwan shares fell 1.4% and New Zealand's NZX-50 was lower by 0.7%. Australia's S&P/ASX 200 was off 0.5%, after making marginal gains earlier in the session.

China's Shanghai Composite was down 0.2% after data showed the economy grew 8.9% in the third quarter from the same period last year, accelerating from the second quarter's 7.9% growth rate, but lower than the median 9.1% forecast.

September industrial output rose 13.9% on the year, beating the average forecast for a 13.3% gain but falling short of the last-minute market chatter for 14.1% growth.

"It was a classic case of 'buy the rumor, sell the fact'," said IG Markets analyst Ben Potter. "Broadly speaking, the data were in line with expectations. If there hadn't been any 'whisper' numbers above consensus the market might have even moved up. China is easily going to have 8.0% growth for the year. That's stronger than anyone thought a few months ago."

RBC Capital Markets Economist Brian Jackson said the numbers showed China's economy "has taken off, but it is flying on one engine," given its reliance on government-directed investment funded by aggressive bank lending.

Among active stocks in Shanghai, Sinopec was off 0.8% and Ping An Insurance down 0.7%, with some using the economic data to take profits. "The index technically needed a correction as previous gains in stocks have mostly priced in the positive effect of this round of economic data," said Li Wenhui at Huatai Securities.

Financials were the biggest losers on the Nikkei, with the sector down 2.5% on ongoing concerns about the global trend for stricter capital rules.

Leading the losers on Korea's Kospi were Samsung Electronics, down 0.8%, Posco, down 2.2% and KB Financial, off 1.3%.

Esprit was lower in Hong Kong, falling 1.7% after the retailer said its first-quarter sales totaled HK$9.37 billion, down 8% from the year-earlier period.

Singapore shares were 0.3% lower with Malaysian shares down 0.1%, Philippine shares off 1.2% and shares in Thailand down by 1.1%.

In the foreign exchange market, the euro was off its highs against the U.S. dollar. The pair had fallen back below $1.50 and was recently trading at $1.4988, from $1.4998 late in New York. The euro was at Y136.52 against the yen, from Y136.85 earlier in Asia and Y136.32 in New York, with the U.S. dollar at Y91.13, from Y90.89.

The benchmark 10-year Japanese government bond yield rose to a two-month high amid growing concerns over the possibility of higher government debt issuance, said Mitsubishi UFJ Securities strategist Katsutoshi Inadome. "The market expects the government to increase the issuance of longer-term JGBs" given that tax shortfalls are expected to force Tokyo to offer more debt in the current fiscal year. The 10-year yield was two basis points higher at 1.365% and lead JGB futures were at 138.37 points, down 0.32.

Spot gold was slightly lower, down 40 cents from New York, to $1,058.40 a troy ounce, looking a bit fatigued after its recent run.

LME three-month copper was $5 lower from the London kerb, at $6,580 a metric ton. Traders said there was some arbitrage selling from China.

Nymex front-month crude oil futures were 50 cents weaker at $80.87 a barrel on Globex, having risen $2.25 in New York.