Despite interest-rate cut, Chinese shares tumble almost 3% amid profit-taking HONG KONG (MarketWatch) -- Asian markets dropped sharply Tuesday in thin trading as investors rushed to take profits ahead of the holidays,. Chinese shares in Shanghai and Hong Kong fell hard as investors ignored an interest-rate cut Monday by the People's Bank of China. "The interest-rate cut was expected and didn't provide any positive surprise. ... The window-dressing activities are quite close to being over," said Ben Kwong, chief operating officer at KGI Asia in Hong Kong, referring to recent buying activity by funds to shore up the value of their portfolios by the end of the year. Kwong said smart investors were rushing to lock in profits ahead of others after strong recent advances. China's Shanghai Composite was off 2.9% at 1,929.28 by late morning, amid persistent worries about a weakening economy and a slowdown in corporate earnings growth. The People's Bank of China cut its key lending and deposit rates by 0.27 percentage point each as part of its efforts to bolster the economy. The central bank also said it would lower the ratio of deposits that banks must set aside by a half-point. Leading losses in Shanghai, China Life Insurance Co. dropped 3.1%, Air China stock shrank 5.6%, PetroChina Co. gave up 2.6%, and Poly Real Estate Group Co. skidded 6.6%. In Hong Kong trading, the Hang Seng Index fell 2.5% to 14,261.34, while the Hang Seng China Enterprises Index gave up 3.9% to 7,823.10. Air China's Hong Kong-listed shares (HK:753: news , chart , profile ) shed 2.9%, while PetroChina Co. (HK:857: news , chart , profile ) slid 4.1%. Japanese markets were closed for the Emperor's Birthday holiday. Australia's S&P/ASX 200 index fell 1.7% to 3,498.50. Resource stocks led the decline in Sydney after an overnight drop in commodity prices, with BHP Billiton slumping 5.2% and Rio Tinto losing 6.7%. "All funds have finished what [buying] they've got to do. And unless anything extraordinary happens, the buyers just meet the sellers at the buyers' price. So there isn't much volume," said Stuart Smith, a private client adviser at Bell Potter Securities in Brisbane. South Korea's Kospi shed 2.9% to 1,145.19. Shares of Korea Zinc Co. gave up 3.7%, while Aluminum Corp. of China, or Chalco sank 7.5% in Hong Kong and 3.8% in Shanghai. Hyundai Motor Co. (HYMTF: , , ) slumped 8.6% and its affiliate Kia Motors Corp. (KIMTF: , , ) plummeted 10.2% a day after they cut their combined sales target for this year to 4.2 million units from 4.8 million. Shares of Ssangyong Motor Co. plunged 13.6%, extending losses from the previous session, on media reports saying the automaker may have trouble paying salaries on time this month. Reuters cited local media reports that China's SAIC Motor Corp., which holds a 51% stake in Ssangyong, has rejected a request for financial support to the South Korean company. Shares of SAIC Motor lost 3.6% in Shanghai. In Wellington, the NZX 50 index gave up 0.7% to 2,660.66, after data released by Statistics New Zealand showed the country's economy shrank 0.4% during the quarter ended Sept. 30, extending a recession and raising chances the central bank might keep its monetary easing bias. See full story on New Zealand economy. Taiwan's Taiex gave up 3.5% to 4,377.96, and Singapore's Straits Times Index lost 0.5% to 1,737.54. February crude-oil futures slipped a further 79 cents to $39.12 a barrel in electronic trading, after tumbling $2.45, or 5.8%, to $39.91 a barrel on the New York Mercantile Exchange. In currency trading, the U.S. dollar bought 90.2 yen, compared with 90.39 yen Monday. The Australian dollar fetched $0.6845, against $0.683 the previous day. On Wall Street, the Dow Jones Industrial Average slipped 0.7% to 8,519.77, the S&P 500 Index lost 1.8% to 871.63 and the Nasdaq Composite lost 2% to 1,532.35.

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