China shares lower in volatile trade

Mainland China shares closed lower after plunging more than 6% the day before, rattling global markets.

The Shanghai Composite closed down 0.18% at 4,611.74 after turning positive for a period during the day.

Analysts said there were a number of reasons for the drops in the past two days, including brokerages tightening lending rules on margin financing.

Another wave of new share offerings next week is also expected to remove liquidity from the market.

Also, a state-owned investment firm said it had sold shares in the top four banks.

Central Huijin Investment confirmed it sold some mainland-listed shares in China's top four banks and other financial institutions. It also sold some Exchange Traded Funds.

News of the sale was cited by traders as one factor behind the plunge in Chinese shares.

Hong Kong's Hang Seng index closed down 0.11% to 27,424.19 points.

The mainland benchmark index has surged more than 140% in the past 12 months, despite a slowing Chinese economy.

Shares in Japan closed higher for the 11th consecutive day after government data gave conflicting messages about the economy.

Inflation was roughly flat in April with core consumer prices rising 0.3%, while household spending was down 1.3% from a year ago. Economists had been expecting spending to rise.

However, the jobless rate fell to 3.3% from 3.4% in March, while industrial output rose 1% - rising for the first time in three months.

The Nikkei finished up 0.06% to 20,563.15, making it the longest rising streak since a 13-day run in February 1988.

Shares in Yahoo Japan rose more than 11% following a local report that the internet giant will team up with Chinese e-commerce firm Alibaba to expand in the Chinese market.

In Australia, the S&P/ASX 200 closed up 1.1% to 5,777.2, boosted by commodity stocks.

A weaker US dollar has helped copper and aluminium recover some losses, while iron ore prices held steady.

Shares in heavyweight miners BHP Billiton and Rio Tinto were up 1.3% and 1% respectively.

South Korean shares were higher, with the benchmark Kospi ended up 0.2% to 2,114.80.

Investors appeared to ignore country data that showed industrial production fell in April for a second month in a row - declining by a seasonally adjusted 1.2%, after falling 0.3% in March.