Asian shares weaker on China property companies, ahead of Fed decision

Asian shares traded  mildly weaker on Wednesday morning with Chinese property developers facing headwinds and other markets soft ahead of the conclusion of Federal Reserve's policy meeting.

The U.S. central bank is to announce its decision on interest rates and monetary policy followed by a press conference with Janet Yellen, her first as head of the monetary authority.

The Shanghai Composite lost 0.94% and Hong Kong's Hang Seng Index fell 0.16%. Local sentiment continued to be weighed by concerns over the property sector--a key driver of the Chinese economy that accounts for 16% of gross domestic product. 

China Merchants Property fell 2.2% to CNY16.32 and Poly Real Estate slid 2.8% to CNY6.69. 

So far this week, data showed that growth continued to moderate in property developers, while a real-estate firm in eastern China was unable to pay almost $600 million in debt.

Shares in developers fell for a second day, with China Vanke Co. down 3.8% in Shenzhen and China Resources Land 2.3% lower in Hong Kong.

More broadly, the region was cautious ahead of the conclusion of the Federal Reserve's policy meeting later Wednesday. The central bank is expected to reduce its bond-buying program by another $10 billion and change its 6.5% unemployment threshold to keep its fund rate near zero into 2015.

Japan's Nikkei fell 0.3%, giving up its earlier gains as the yen strengthened against the dollar. Japan Display Inc. slumped 15% on debut trading in Tokyo. The world's largest manufacturer of screen for smartphones and tablets raised as much as $3.2 billion earlier this month in a deal that was priced at the bottom of the proposed range.

Australia's S&P/ASX 200 was flat and South Korea's Kospi was up less than 0.1%.

The region failed to take a positive lead from the U.S., where the S&P 500 ended the day close to a record as fears of escalating tensions over Crimea abated. At the close of U.S. trading Tuesday the Dow Jones Industrial Average rose 0.55%, the S&P 500 index rose 0.72%, while the Nasdaq Composite index rose 1.25%.

Relief buying sent stocks rising as did data suggesting the U.S. economy continues to recover despite lingering headwinds.

The Labor Department on Tuesday reported that the U.S. consumer price index slowed to 1.1% in February from 1.6% in January. Analysts had expected the annual inflation rate to decline to 1.2%.

Month-on-month, U.S. consumer prices rose 0.1% in February, in line with forecasts.

Core inflation rates, which are stripped of volatile food and energy prices, rose 1.6% on year and 0.1% month-on-month, both figures in line with market forecasts.

The Federal Reserve plays close attention to core inflation rates when deciding on monetary policy.

Separately, the Commerce Department reported that the number of building permits issued in the U.S. rose to a four-month high in February, rebounding after a sharp drop in January.

The number of building permits issued last month jumped 7.7% to 1.018 million units, beating market calls for a 1.6% increase..

U.S. housing starts, however, fell 0.2% last month to hit a seasonally adjusted 907,000 units, disappointing expectations for an increase of 3.4% to 910,000 units, though investors viewed the day's data as bullish from an overall take.

European indices, meanwhile, finished higher.

After the close of European trade, the EURO STOXX 50 rose 0.78%, France's CAC 40 rose 0.97%, while Germany's DAX 30 rose 0.67%. Meanwhile, in the U.K. the FTSE 100 rose 0.56%.