Most Asia Stocks Drop on U.S. Budget Even After China PMI

Most Asian stocks fell as Chinese shares retreated even after reports showed manufacturing expanded. Exporters to the U.S. declined as lawmakers debate a budget compromise to avert a so-called fiscal cliff.

Industrial & Commercial Bank of China Ltd. dropped 1.5 percent in Hong Kong, where the Hang Seng Index touched its highest level in more than a year before tumbling. Li & Fung Ltd., a supplier of toys and clothing to retailers including Wal-Mart Stores Inc., slipped 3 percent in Hong Kong. Shimizu Corp., a construction company, advanced 4 percent in Tokyo on speculation a deadly highway-tunnel collapse will reduce opposition to more public works spending.