- Asian stock markets were mixed on Tuesday, amid ongoing tensions in Iraq and as investors remained cautious ahead of the Federal Reserve''s policy meeting due to begin later in the day.

During late Asian trade, Hong Kong''s Hang Seng dipped 0.45%, China’s Shanghai Composite declined 0.9%, Australia’s S&P/ASX 200 closed 0.21% lower, while Japan’s Nikkei 225 ended up 0.29%.

Markets players continued to monitor developments in Iraq, where the conflict between radical Sunni insurgents and Shiite Iraqi soldiers continued on Monday.

Investors now looked ahead to the outcome of the upcoming Fed policy meeting on Wednesday, as they await fresh indications on the timing of possible interest rates increases.

Data released Monday showed that manufacturing activity in the New York region expanded more quickly than forecast in June, while a separate report showed that industrial production rose more than expected in May.

The Federal Reserve Bank of New York said that its general business conditions index increased to 19.3 this month from a reading of 19.0 in May. Analysts had expected the index to decline to 15.0.

U.S. industrial production rose by a seasonally adjusted 0.6% last month, above forecasts for a 0.5% gain.

In Tokyo, the Nikkei edged higher as traders continued to monitor movements in the currency market. The yen rose to ¥102.06 against the U.S. dollar, compared to ¥101.87 on Monday.

Elsewhere, in Australia, the ASX/200 Index fell modestly in subdued trade, while the Australian dollar declined against the greenback.

The Aussie weakened to 93.48 U.S. cents from 93.90 U.S. cents in the prior session after minutes from the Reserve Bank of Australia’s most recent policy meeting repeated that an accommodative stance of lower interest rates will remain and warned of subpar economic growth ahead.

Losses in the mining sector weighed on the benchmark index, with Fortescue Metals Group (ASX:FMG) down 3%, while BHP Billiton (ASX:BHP) and Rio Tinto (ASX:RIO) slumped 0.7% and 1% respectively.

Meanwhile, shares in mainland China and Hong Kong came under pressure amid ongoing concerns over the health of China’s economy. Data released earlier showed that foreign direct investment in the country unexpectedly declined last month.

Looking ahead, European stock market futures pointed to a modestly higher open. The Euro Stoxx 50 futures pointed to a gain of 0.2%, France’s CAC 40 added 0.4%, London’s FTSE 100 indicated a gain of 0.2%, while Germany''s DAX inched up 0.3%.

Across the Atlantic, U.S. equity markets also pointed to a firm open. The Dow futures pointed to a gain of 0.1%, the S&P 500 inched up 0.1%, while the Nasdaq 100 indicated a rise of 0.1%.

The ZEW Institute is to release its closely watched report on German economic sentiment, while the U.S. is to produce data on housing starts, building permits and consumer prices.

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