Shares in Asia were largely in negative territory on Tuesday following declines in the US and as falling iron ore prices continued to hurt mining companies.

In Australia the S&P/ASX 200 was down 0.34% at 5,256.60 points.

Analysts said iron ore prices were continuing to move towards a decade low reached earlier this year.

The commodity is Australia's biggest export and was trading at $44.74 a tonne in China on Monday.

Independent economist and commodities specialist Andy Xie has predicted that iron ore prices will fall below $40 a tonne before the end of the year.

He said prices could even sink as low as $30 for much of next year as demand from China continues to decline.

Three of the biggest iron ore producers posted falls for their Sydney-listed shares in afternoon trade.

BHP Billiton was down 1.3%, Rio Tinto fell 0.77%, while Fortescue Metals was the biggest loser, sinking 3.44%.

Elsewhere in Asia

Japan's Nikkei index was flat, down 0.08% at 19,863.51 points after being closed on Monday for a public holiday.

According to a flash estimate, Japan's manufacturing activity expanded in November as new orders and output increased.

The Markit/Nikkei Japan Flash Manufacturing Purchasing Managers Index (PMI) rose from 52.4 in October to 52.8 in November. A reading of about 50 indicates an expansion.

The reading was the highest it had been since March last year - ahead of the introduction of the country's sales tax.

Marcel Thieliant from Capital Economics said the reading suggested Japan's economy had returned to growth this quarter.

"Today's survey confirms that economic activity is on the mend. But with large amounts of spare capacity dampening price pressures, we still think that the Bank of Japan may have to step up the pace of easing in coming months," he added.

In China, losses were being extended after new rules for the mainland's stock exchanges aimed at limiting leveraged bets on the market and reducing speculative behaviour were introduced on Monday.

Investors were concerned over available liquidity ahead of the restart of initial public offerings.

On Tuesday the Shanghai index was down 1% at 3,574.35.

While in Hong Kong, the Hang Seng index was down 0.7% at 22,510.04.

South Korea's Kospi index was the only bright spot, up 0.27% at 2,009.18 after closing close to a two-week high on Monday.

(BBC)