Asia Markets

Asian equities depressed by yuan's sharp fall

Asian equities headed further south on Wednesday, as the People's Bank of China (PBOC) allowed the to extend sharp losses for the second straight day.

Prior to the market open, the central bank set the midpoint rate for the currency at 6.3306 per dollar, 75 points weaker than the previous day's 6.2298 level. The guidance rate — which marked the weakest level for the currency since October 2012 — sent shockwaves through the region's markets.

The Australian dollar fell as much as 1 percent to touch a six-year trough of $0.7216, while its Antipodean peer, the , eased 0.6 percent to trade at its lowest since July 2009 against the greenback. Southeast Asian currencies were similarly spooked; the Singapore dollar dropped to a fresh five-year low of 1.4149, while the Indonesian rupiah and Malaysian ringgit hit fresh lows unseen since the Asian Financial Crisis (AFC) in 1998.

Read MoreWhere now for the yuan? Only the PBOC really knows

Also weighing on sentiment was a negative handover from Wall Street overnight, where major U.S. indices lost their footing as the unexpected weakening of the yuan took a toll on commodity-related shares and fueled worries about global growth. The blue-chip and Nasdaq Composite dropped 1.21 and 1.27 percent, respectively, while the S&P 500 lost 0.96 percent Tuesday.

The Chinese central bank took investors around the world by surprise early Tuesday when it implemented what it said was a one-time yuan depreciation of nearly 2 percent, causing the currency to suffer its biggest fall in over two decades.

Mainland markets down

China's Shanghai Composite index lurched lower in late-trading to close down 1 percent.

Chinese carriers were among the hardest-hit by the yuan's continued slide. China Eastern Airlines and China Southern Airlines slumped nearly 6 percent each on the back of worries that a weaker currency could increase the borrowing costs and the fuel bills of Chinese carriers. Air China lost 4.4 percent.

"We estimate that each percentage point of [renminbi] depreciation would lead to about 6-10 percent cuts in the Chinese airlines' FY15 reported earnings, mainly due to [currency] loss from U.S. dollar debt revaluation," analysts from Deutsche Bank wrote in a note.

A slew of data releases in the afternoon, including July retail sales, industrial output and fixed-asset investment, missed estimates marginally, but had little impact on the markets.

Other indexes in the mainland tracked the movements in the benchmark index. The blue chip CSI300 index and Shenzhen Composite widened losses in the final hour of trading to finish more than 1 percent lower each.

Read MoreChina's big-spending tourists pause at stores as yuan drops

Hong Kong's index plunged 2.4 percent to a near five-week trough, led lower by sharp losses in the property and gaming sectors.

Internet giant Tencent Holdings, due to release corporate earnings after the market close, fell 4.5 percent. Bourse operator Hong Kong Exchanges and Clearing (HKEx) held on to losses of 4.2 percent, despite posting a 112 percent surge in April-June net profit.

Offering some support for the bourse, Li & Fung —a Hong Kong-based company which sells China-made goods to the U.S. and Europe— rallied 3.7 percent. However, other Chinese exporters reversed Tuesday's gains, with China Machinery Engineering Corp. and Lenovo Group tanking 5 and 2.3 percent, respectively.

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Nikkei skids 1.6%

Japan's Nikkei 225 widened losses to end at a one-and-a-half-week low.

Stocks with significant exposure to China such as construction equipment makers Komatsu and Hitachi Construction Machinery tumbled 2.9 and 2.7 percent, respectively. Steelmakers also extended losses, with JFE Holdings and Japan Steelworks plunging 7.1 and 3.9 percent, respectively.

Oil-related plays such as JX Holdings and Showa Shell Sekiyu lost 1.4 and 2.6 percent, respectively, as U.S. oil prices hover near six-year lows.

A strong quarterly report insulated Seiko Holdings from the sell-off; shares of the watch maker ended up 7.3 percent.

ASX loses 1.7%

Australian shares dropped to a more than one-month low as the energy and resources sectors, which make up over 30 percent of the index, declined on the back of a rout in commodity prices.

Santos and Woodside Petroleum eased 4.9 and 3.8 percent, respectively, while index heavyweights BHP Billiton and Rio Tinto lost 5.4 and 4.3 percent, respectively.

However, advances among the gold plays offset some of the downward pressure. Evolution Mining and Kingsgate Consolidated bounced up 1 and 9.1 percent, respectively, as the price of the precious metal held near a three-week high in Asian trade.

Before the market open, Commonwealth Bank of Australia announced a 5 billion Australian dollar ($3.65 billion) rights issue to boost capital in response to regulatory pressure. Earlier, the lender delivered a 5 percent rise in full-year cash profit to A$9.14 billion, from A$8.68 billion a year earlier. Shares of the country's second-biggest lender are in a trading halt.

On the back of the announcement, Westpac, Australia and New Zealand Banking and National Australia Bank closed down nearly 2 percent each.

Among other companies releasing their corporate earnings, Computershare slumped nearly 10 percent after the investment service provider said its full-year net profit fell almost 40 percent. Gaming firm Echo Entertainment tanked 2.4 percent despite delivering a 59 percent rise in full-year net profit.

Here's the downside in CBA's earnings results

Kospi eases 0.6%

South Korea's Kospi index halved losses by the end of Wednesday's trading session, but stayed near its lowest level since March 12.

Heavyweight steelmaker Posco lost 1 percent, while China-exposed plays in the retail and consumer discretionary sectors were battered. Cosmetics makers AmorePacific and LG Household & Healthcare plunged 6.1 and 2.9 percent, respectively, while Shinsegae and Hotel Shilla skidded 3.3 and 4.8 percent, respectively.

On the other end of the spectrum, Daewoo Shipbuilding and Marine Engineering rose 4.3 percent on the back of news that the money-losing shipbuilder is planning job cuts and pay reductions.

Shares of Lotte Shopping jumped 7.8 percent, buoyed by news that the company will simplify its shareholding structure and list its hotel unit.

Also bucking the downtrend, Hyundai Motor and Kia Motors elevated more than 5 percent each, as investors bet on a weaker won to boost car sales. On Wednesday, the won lost more than 1 percent of its value against the greenback to hit a fresh four-year trough of 1,191.40.

Read MoreWhy China has moved to 'uncharted waters': Expert

Rest of Asia lower

Stock markets in Southeast Asia remained on the back foot Wednesday.

Singapore's benchmark Straits Times index and Indonesia's Jakarta Composite plunged more than 2 percent to hit new lows since 2014, while Malaysia's benchmark FTSE Bursa Malaysia KLCI index sold off 1.4 percent to touch its lowest since end-March 2013.

In India, the benchmark BSE Sensex index and the 50-share Nifty index shed 0.4 and 0.5 percent, respectively, ahead of the release of June industrial production and July inflation data later in the day. The rupee, meanwhile, traded near two-year lows against the U.S. dollar.