China shares outperform on banks; rest of Asia hurt by global selloff

Mainland equities resumed trade with sharp gains on Tuesday following a long weekend while the rest of Asian stocks extended losses following a global stock selloff overnight.

U.S. stocks declined for a third session, with all three major indices losing more than 1 percent as tech and internet stocks like, Priceline Group, Google and Apple extended losses. Monday's decline pulled the S&P 500 into the red for the year while the Nasdaq recorded its biggest three-session drop since November 2011.

Read MoreWhy the shakeout in stocks is likely to persist

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"I don't really think this will be a big market correction. There's been a lot of momentum stocks that have gone far ahead of where everyone expected them to so the steam has to come out of those, but overall the market is still creating great opportunity for long-term investors," said Mike Crofton, president and CEO of Philadelphia Trust Company.

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The unofficial start of the U.S. quarterly earnings season will begin after Tuesday's market close, with aluminum producer Alcoa. Banks JPMorgan Chase and Wells Fargo also report this week.

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Shanghai up 1.9%

China's benchmark Shanghai Composite rallied to a one-and-a-half month closing high thanks to a rally in the banking sector. The market was closed on Monday for 'Tomb Sweeping Day.'

Industrial Bank surged 8 percent while Minsheng Bank, Pudong Development Bank and Hua Xia Bank climbed nearly 5 percent each

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Financial-software developer Hundsun Tech resumed trade to rally by the maximum daily trading limit of 10 percent after an Alibaba-owned company agreed to pay $532 million for a more than 20 percent stake in the firm.

Citic Bank jumped 2.8 percent after its parent firm Citic Group announced that it plans to list most of its operating assets on the Hong Kong Stock Exchange.

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Nikkei 1.3% lower

Japan's benchmark Nikkei closed at its lowest level in two weeks, extending losses from Monday's 2 percent tumble, as a stronger yen overshadowed positive data.

The currency rose to 102.8 per dollar, its strongest level since March 28, despite data showing February's current account returned to a surplus for the first time in five months.

Pharmaceuticals were the biggest losers, with Takeda Pharmaceutical down 5 percent on reports that a U.S. jury ordered the firm to pay a $6 billion fine for a case related to its diabetes drug.

Internet stocks continued their selloff, with Softbank and Rakuten down 4.5 and 2 percent, respectively.

Meanwhile, the Bank of Japan (BOJ) concluded its two-day policy meeting with no change to its current policy, as expected. Speaking after the market close, governor Harihiko Kuroda said the economy's positive cycle remains in place thanks to strong domestic demand.

ASX flat

Australia's benchmark index pared losses to end little changed from Monday's close after a private survey of March business confidence declined from the previous month.

Cattle provider Australian Agricultural Company jumped 4.4 percent after Japan and Australia agreed to a basic trade deal that will see reduced tariffs on Australian beef.

Treasury Wine Estates surged 7.2 percent after CEO Michael Clarke said that the company was investigating options to improve shareholder value.

Kospi up 0.2%

South Korean shares erased early losses after hitting a one-week low earlier in the session following weak data. The Finance Ministry said the economy ran a fiscal deficit of 1.5 percent of annual growth domestic product in 2013, bigger than 2012's figure.

Tech giant Samsung Electronics dipped 0.2 percent following an earlier 1 percent slide after announcing that it expects first quarter operating profit at 8.4 trillion Korean won ($7.96 billion), just shy of Reuters' forecast of 8.52 trillion.

Meanwhile, the won strengthened to 1,052 per dollar, its strongest level in over three months.

Indian markets were shut on Tuesday for a public holiday.