Mainland markets mixed
The Shanghai bourse ended down 1.7 percent in a volatile session, even though authorities unveiled fresh rescue measures following the more than 8 percent plunge on Monday.
The China Securities Regulatory Commission said late Monday that the local government will increase purchases of stocks in an effort to support the equity market, while the central bank injected cash into money markets and hinted at further monetary easing.
On late Tuesday, the country's securities regulator says it is investigating "share dumping incidents that occurred on Monday," according to Reuters.
However, the Shanghai Composite swung between gains of more than 1 percent and losses as much as 5 percent throughout the session, raising fears of a fresh stock market rout in the world's second-biggest economy.
Among China's other indexes, the CSI300 index and the smaller Shenzhen Composite notched down 0.2 and 2.2 percent, respectively. In Hong Kong, the Hang Seng index bucked the downtrend to rise 0.6 percent.
Some analysts fear there's more pain to come in the coming trading days.
"Investors are still very cautious of the performance of the A-shares and we may see further drop of the A-share index," Ronald Wan, chief executive of investment banking at Partners Capital International, told CNBC. "When there [are] negative news, investors compete with each other to get out so we will see volatility. Investors are also not confident of whether the rescue package is sustainable so we will see further deterioration in investment sentiment over the next few days [and] hence further drop [in the index] is expected."
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After three weeks of relative stability in the mainland markets, the key Shanghai bourse plummeted 8.5 percent on Monday - its biggest one-day drop in eight years - as latest economic data served up fresh growth concerns. Data released on Monday showed industrial profits down 0.3 percent year-on-year in June, while Friday's preliminary China Caixin purchasing managers index (PMI) surprised markets by dropping to a 15-month low in July.
Concerns that Beijing may be reluctant to dole out further support measures and the slump below the key psychological level of 4,000 points also contributed to Monday's sell-off, analysts said.
"4,000 was a key level for a lot of people. Once it started falling below that, locking in gains or minimizing one's downside becomes a priority," Andrew Sullivan, managing director for sales trading at Haitong International Securities, told CNBC Asia's "Squawk Box."
Meanwhile, shares of China Eastern Airlines dropped 3.7 percent in Shanghai and 3.9 percent in Hong Kong, after Delta Air Lines agreed to buy 3.55 percent of the Chinese carrier.