Asian Shares Mixed

Asian markets were mixed Friday following poor economic data from Europe, while Australia rebounded from Thursday's heavy selling.

Overnight cues put most markets on the back foot early Friday�weaker-than-expected manufacturing data from Germany and France were in focus. The absence of further bad during Asian trading however, meant that regional markets were able to go positive or pare their losses as the session progressed.

"The data in Europe confirmed the idea that the recovery in Europe is still a long way off," said Matthew Sherwood, head of investment market research at Perpetual Investments in Sydney.

Europe remained on the agenda, amid caution before the election in Italy, which goes to the polls on Sunday and Monday. Investors are concerned that the new government could lack a strong mandate or even reverse the country's reform agenda.

The mixed showing followed declines on Thursday where there was a heavy selloff after the minutes from U.S. Federal Reserve's most recent policy meeting raised concerns that the central bank's stimulus measures could come to an end earlier than expected.

"Markets were probably overheated. They had risen very aggressively and were probably ready for a pullback," said Perpetual's Mr. Sherwood.

However, both a number of markets look set to end the week in positive territory, with Japan's Nikkei up 1.5% week-to-date and South Korea up 2.1% over the same period.

Chinese stocks will probably not be so fortunate, with markets in both Hong Kong and Shanghai set to finish the week lower amid fears that Beijing will implement further tightening measures to control prices in the residential property market. The impact was most evident in mainland China, where the Shanghai Composite was down 4.4% week-to-date, with Hong Kong's Hang Seng Index down 2.6% over the same period.

The Australian dollar climbed after Reserve Bank of Australia Governor Glenn Stevens said at a parliamentary committee that interest rates were at an "appropriate level," suggesting a pause in the central bank's series of aggressive rate cuts.

The Australian dollar was recently at US$1.0299 compared with US$1.0240 before the governor's testimony.

The U.S. dollar was roughly steady against the yen early Friday, recently at �93.27, following a 0.5% overnight decline. The market was waiting to find out who would be the next governor of the Bank of Japan, with a decision expected to be made soon.

Japan's Nikkei rose 0.7% and South Korea's Kospi Composite added 0.2%.

Australia's S&P/ASX 200 rose 0.8%, making a decent recovery on the 2.3% plunge the market made on Thursday.

In mainland China, the Shanghai Composite fell 0.2%, adding to Thursday's losses, weighed by an extended pullback in financial stocks, while concerns over liquidity conditions also offered investors an excuse to exit the market.

China Minsheng Banking Corp. lost 2.8%, Ping An Insurance (Group) Co. of China fell 1.7% and Citic Securities was down 1.4%.

In Hong Kong, the Hang Seng Index ended down 0.5%.

Write to Daniel Inman at daniel.inman@wsj.com