Asian stocks hit new lows amid oil, Greece fears

Mounting anxiety over the relentless fall in oil prices and growth concerns over China dragged Asian stock indices to new lows on Tuesday.

Wall Street's lower finish overnight weakened investor sentiment further. The Dow Jones Industrial Average shed 1.9 percent, while the S&P 500 declined 1.8 percent – chalking up its fourth consecutive decline. The tech-heavy Nasdaq dropped 1.6 percent.

In early Asian trade, U.S crude futures stood little changed around $50 a barrel, trading near the lowest level since April 2009 which was hit a day earlier, as demand concerns and robust global production weighed on prices. London Brent crude for February delivery was untraded yet, after settling down $3.31 at $53.11 on Monday.

Despite a weak start to the new year thus far, David Joy, chief market strategist at Ameriprise Financial, believes that stock markets will eventually rise. "This [decline in oil] is a net positive. People are worried that this is foreshadowing global weakness but i don't think that is the case. 2015 is going to be a decent year for equity returns."

ASX 200
CNBC 100

Nikkei plunges 3%

Japan's key Nikkei 225 index settled down at a near three-week low, as trading sentiment was hit by a double whammy of declining oil prices and a stronger yen. The Japanese currency rose to trade at 118.73 - a two-and-a-half-week high - against the greenback on the back of safe haven bids.

Inpex - the country's largest oil & gas exploration firm - was among the worst hit, plunging 5.8 percent on Tuesday.

Blue-chips also languished due to a pause in the yen's weakening. Canon and Toyota Motor fell neraly 3 percent, respectively. Sony - which announced that sales of its Playstation 4 surpassed 18.5 million units worldwide - closed down 1.2 percent.

Fast Retailing, owner of clothes brand Uniqlo, slipped 1.8 percent despite announcing robust same store sales. Sales for December rose 10.2 percent on-year.

Read MoreSony chief hits at 'vicious' cyber attack

ASX tanks 1.6%

Australia's benchmark S&P ASX 200 index closed down at 5,364 - a near two-week low - on Tuesday as its resources sector came under pressure.

Oil-related counters took the biggest chunk of losses; Oil Search and Santos fell over 8 percent, while BHP Billiton plunged 4.7 percent, as oil prices plumbed new lows.

Banking stocks were also sluggish due to profit taking; Macquarie Group dropped 2.3 percent while Australia and New Zealand Banking Group and National Australia Bank finished 1.2 and 0.8 percent lower, each.

Meanwhile, the Australian dollar jumped 0.9 percent to fetch $0.8150 against the greenback late Tuesday, following trade figures for the month of November which showed a smaller-than-expected trade deficit.

"The currency was helped by better-than-expected trade numbers, but it appears that the market is continuing to short the Aussie dollar," Callum Henderson, global head of FX Research at Standard Chartered, told CNBC's "Street Signs Asia." "We are seeing some degree of consolidation but you should be selling the rally."

Mainland indices down

China's Shanghai Composite index pared losses to close up a modest 0.1 percent on Tuesday, backing down from a more than five-year high it attained earlier in the day.

Energy plays China Oilfield Services and Sinopec lost 3.2 and 2 percent respectively, while Founder Securities slumped 3 percent after a court froze some of its assets.

Vanke was in focus after announcing a 26 percent rise in 2014 sales, but the property developer's stock receded nearly 4 percent in Shanghai and 5 percent in Hong Kong.

Capping losses were train makers CSR and China CNR, which rose the maximum allowable of 10 percent for the second consecutive day. Airlines also extended Monday's gains on the back of cheaper oil, with Air China leading the sector with a 4.3 percent gain. China Southern Airlines scaled up 2 percent, unaffected by news that more executives are under investigation for suspected job related crimes.

Earlier in the day, data showed the mainland's services sector grew at its fastest pace in three months in December.

Meanwhile, Hong Kong's Hang Seng index fell 1 percent to a near two-week low.

Read MoreThis week's market watch list: China, Australia data

Kospi falls 1.7%

South Korean shares sagged to a two-and-a-half-week low on Tuesday, as energy stocks were battered by the ongoing slide in energy prices. Earlier in the session, the Kospi index hit 1,877 - its lowest level since August 2013 - before closing down 1.74 percent.

Among top losers, energy producers SK Innovation and S-Oil lost 2.8 and 6.5 percent.

Samsung Electronics notched down 3.2 percent as markets awaited fourth quarter earnings guidance due this week. Rival LG Electronics was in the news for unveiling its second curved phone - the G-Flex 2. Shares of the company reversed early losses to rise nearly 3 percent.

Hyundai Motor and sister firm Kia Motors reported that their combined sales in the U.S. reached a record high of 1.3 million cars on Tuesday, but the news failed to lift the automakers. Shares of the two firms sold off 1.8 and 1.2 percent, respectively.

Nifty loses 3%

India's Nifty index tracked Asia-wide losses to slump to a near two-week low before closing down 3 percent.

Keeping an eye on Greece

Adding to the gloom is intensifying talk of a Greek exit from the euro zone. The country announced snap general elections for January, with Syriza, the far-left opposition party which has vowed to overthrow the onerous terms of Greece's international bailout, likely in the lead.

Brewing political uncertainty, along with bets on quantitative easing by the European Central Bank (ECB), set the euro tumbling to its weakest level since June 2010 on Monday while European shares closed sharply lower.

In Tuesday's Asian trade, the currency was quoted at $1,1960 to the dollar.

"Investors are concerned that we will revisit the contagion 3 years ago so we are seeing a risk-off situation. The message from the ECB is there's enough time for them to be better prepared but it isn't sufficient to convince the market," Mark Konyn, CEO of Cathay Conning Asset Management, told CNBC Asia's "Squawk Box." "So we saw the equity market selloff in Europe overnight."