Caution reigns in Asian stock markets Tuesday 03:00 GMT. Caution continued to reign across Asian equity markets after US stocks fell for a third straight session and as investors looked ahead to key events later in the week. In Japan, the Nikkei 225 average was 0.5 per cent lower following a 2.4 per cent fall in its first trading day of the year on Monday. In China, the Shanghai Composite was down 0.4 per cent, a fourth straight decline that placed the index at a six-month low. On the other hand, South Korea's Kospi Composite added 0.4 per cent while Hong Kong's Hang Seng rose 0.2 per cent. The mixed session followed a third straight day of losses for the S&P 500 in New York. The benchmark index fell 0.3 per cent after a closely watched services sector survey missed expectations and showed the first drop in new orders, a forward-looking component, since 2009. Equity analysts attributed the shift to caution ahead of interest-rate decisions later this week from the European Central Bank and the Bank of England, as well as the key US monthly jobs report. "While the rise in risk aversion is unlikely to reflect a major change in market sentiment, it does highlight that risk assets will not repeat the one-sided moves recorded in [the fourth quarter] last year over coming months," Crédit Agricole analysts wrote to clients. The US Institute for Supply Management's non-manufacturing index slipped to 53.0 last month from 53.9 in November, but the focus for many observers - ahead of the release on Friday of the December non-farm payrolls - was a solid rise in the employment sub-index. The Japanese yen retreated 0.1 per cent against the US dollar, helping curb losses on Tokyo bourses. The yen climbed 0.6 per cent on Monday as investors sought havens, adding pressure on Japanese equities. The South Korean won weakened 0.3 per cent against the dollar, providing a favourable backdrop for its equity market to climb. Samsung Electronics, which accounts for nearly one-fifth of the Kospi, managed to eke out a small 0.1 per cent gain even after posting weaker-than-expected earnings guidance for the last quarter. Samsung said fourth-quarter operating profit was likely to be around Won8.3tn ($7.8bn), down from a record Won10.2tn in the third quarter. In Australia, Sydney's S&P/ASX 200 was up 0.3 per cent, supported in part by data showing November's trade deficit was the smallest since March. The Australian Bureau of Statistics said the seasonally adjusted trade deficit was A$118m, almost a third smaller than the A$300m deficit predicted by forecasters. Exports were flat in the month, confirming the mining boom has waned, while imports fell 1 per cent.