Asia shares shake off losses, oil firms

Asian shares cautiously nudged into positive territory on Tuesday after downbeat economic data pressured Wall Street ahead of a key US jobs report that could provide important clues to the timing of the Federal Reserve's interest rate increase, Reuters reported.

Crude oil prices firmed after plunging overnight, with U.S. crude CLc1 adding about 0.7 percent to $45.49 a barrel. Brent LCOc1 gained 0.4 percent to $49.70 after skidding 5 percent to six-month lows.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was slightly higher, while Japan's Nikkei stock index .N225 slipped 0.2 percent, after breaking a three-day winning streak in the previous session.

China stocks were higher, with the Shanghai Composite Index .SSEC and the CSI300 index .CSI300 both up more than 1 percent. Beijing has taken a raft of steps to support Chinese share markets after they lost more than 30 percent of their value since peaking in June.

"The market is still very volatile ... investors are likely to be quiet and see what the next step of the government will be," said Patrick Yiu, a director of CASH Asset Management in Hong Kong.

"The overall market momentum is not likely to pick up anytime soon and the economy in China is still very weak," added Yiu.

US equities markets stumbled overnight, after manufacturing data from China and the U.S. both disappointed.

The Institute for Supply Management's index of national factory activity slipped to 52.7 in July, falling short of expectations that it would match last month's reading of 53.5.

The weak reading, and fears of disinflation stemming from the rout in oil prices, led investors to pare bets that the Fed's long-awaited interest rate hike will come as early as September.

Friday's employment data is expected to show the U.S. economy created 225,000 new jobs in July, according to economists polled by Reuters. The unemployment rate is expected to hold steady at 5.3 percent.

"If we get some certainty about the strength of the U.S. economy and the likelihood of policy normalization by the Fed, and if a rate hike seems justifiable, that is positive for sentiment for global risk-on because a lot of people have been bracing for this," said Stefan Worrall, director of cash equities at Credit Suisse.