Chinese shares lurched lower in late-trading on Tuesday, depressing Asian stock markets which succumbed to nerves over the possibility of a falling yuan and a deadly bomb explosion in Thailand.
A positive handover from Wall Street did little to help sentiment; the tech-heavy Nasdaq led gains with a 0.9 percent rise overnight, as investors scooped up battered biotech plays, while the and the S&P 500 notched up 0.4 and 0.5 percent, respectively, on the back of positive homebuilder data.
Mainland markets fall
China's Shanghai Composite index accelerated the pace of decline in the afternoon session, closing down 6.12 percent at its lowest level since August 7, as concerns over the yuan eclipsed data which showed monthly home prices up for a third straight month in July, indicating that country's all-important property sector may be finally bottoming.
Prior to the market open, the People's Bank of China (PBOC) set the midpoint rate at 6.3966 per dollar, firmer than the previous fix of 6.3969. However, the yuan fell against the greenback, slipping modestly to last change hands at 6.4011.
Among the mainland's other indexes, the blue-chip CSI300 and the smaller Shenzhen Composite plummeted 6.2 and 6.6 percent, respectively. Hong Kong's Hang Seng index tracked the losses in its mainland peers to move down 1.1 percent, touching a near six-week trough.
"With today's unsurprising yuan fixing, volatility in the [yuan] appears to have been put back in its box. However, the internal dynamics of China's economy continue to flash warnings that this calm will not last," Angus Nicholson, IG market analyst, wrote in a note.
Property counters were in focus; the country's largest residential property developer China Vanke inched down 0.2 percent in Hong Kong, but its Shenzhen-listed A-share plunged 3.7 percent. Hong Kong-listed China Overseas Land and China Resources Land lost 1.7 and 2.6 percent, respectively, while in Shanghai, Poly Real Estate and Gemdale erased gains to tank 8.3 and 6.5 percent, respectively.
Meanwhile, the utilities and industrial sectors were among the hardest-hit, with Jiangsu Linyang Electronics, Baoding Tianwei Baobian Electric and Jiangxi Ganyue Expressway losing the daily maximum allowable of 10 percent each. China Shipbuilding Industry and China Shenhua Energy also closed down 10 percent each, despite news that Beijing may be close to announcing broad plans to reform its state-owned enterprises (SOEs) this month.
SET slumps 2%
The tourism and leisure sub-index plunged 7.1 percent on the back of concerns that the latest attack could hurt the country's crucial tourism sector. According to newswires, Hong Kong's government has issued a "red alert" advisory against non-essential travel to Thailand.
Erawan Group —the operator of Bangkok's Grand Hyatt and the Marriott Courtyard hotels— skidded 9.2 percent, while other stocks with exposure to tourism such as Thai Airways and Airports of Thailand tumbled 5.5 and 6.6 percent, respectively.
Meanwhile, the Thai baht lost as much as 0.5 percent to 35.55 against the U.S. dollar - marking its lowest since April 2009.
Nikkei slips 0.3%
Japan's Nikkei 225 edged down, with the day's sentiment dominated by corporate news.
Toshiba was in focus after the Nikkei business daily reported that the industrial conglomerate could be announcing new leadership soon. The Japanese newspaper also reported on Monday that Toshiba is expected to report a net loss for the last fiscal year and could revise down its fiscal 2011/12 earnings to a loss following an investigation into its accounting practices. Shares of Toshiba ended flat after swinging between modest gains and losses.
Discount store operator Don Quijote Holdings slumped 1.7 percent, after Monday's earnings report showed slowing sales and profit growth.
Shares of Olympus retreated 3.7 percent on the back of news that the U.S. Food and Drug Administration has issued warning letters to the makers of medical scopes linked with a recent superbug outbreaks. However, Fujifilm Holdings, another manufacturer given the warning letter, managed to cut losses and end up 0.2 percent.
ASX sags 1.2%
Australia's S&P ASX 200 index reversed a higher open to end in the red, tracking regional losses as worries over China's economy dampened risk appetite.
Asciano soared 7.2 percent after the Australian ports and rail operator agreed to a $6.6 billion takeover bid from Canada's Brookfield Infrastructure Partners. Asciano shares resumed trading on Tuesday after the company requested removing its shares from the trading halt prior to the market open.
Insurer QBE narrowed advances to 0.4 percent on the back of delivering a 24 percent rise in first-half net profit.
Among the laggards, Australia and New Zealand Banking Group closed down nearly 2 percent, despite announcing before the market open that its unaudited cash profit for the nine months to end-June rose 4 percent to 5.4 billion Australian dollars ($3.98 billion) even as its bad debt charge climbed 13 percent. Electronics retailer Dick Smith Holdings plunged 16.5 percent after releasing a weaker-than-expected earnings report.
Meanwhile, the Reserve Bank of Australia (RBA) said leaving interest rates at record lows this month was appropriate as it noted that the economy was adjusting to the end of the mining investment boom, the minutes released early Tuesday revealed.
Kospi drops 0.6%
South Korea's Kospi index erased early gains to close down on the back of continued foreign selling, but a pick-up in buy orders for blue-chip names provided some support forthe bourse.
LG Display climbed 2.7 percent after the company said on Monday it would focus investment on organic light-emitting diode (OLED) displays.
Meanwhile, SK Telecom said it would be forming a consortium with online shopping site Interpark to set up internet banks, according to local media reports. Shares of the former gained 0.8 percent, while the Kosdaq-listed latter surrendered earlier gains to fall 4.3 percent.
Decliners included cosmetics makers such as AmorePacific and LG Household & Healthcare, as well as Shinsegae, which suffered losses between 1.9 and 4.9 percent.
JKSE tanks 1%
Indonesian stocks struggled as the Bank Indonesia (BI) kept its policy rate unchanged at 7.50 percent, on the back of rising inflation and capital outflows due to renewed weakness in the rupiah.
On the domestic data front, the country posted a surprisingly large trade surplus in July at $1.33 billion, from a revised $528 million in June, the country's statistics bureau said on Tuesday.
"It reflects the poor economy, both in terms of demand and a lack of competitiveness in exports. We also need to take into account the falling commodity prices, since Indonesia is still exporting commodities," Nizam Idris, head of fixed income and currencies at Macquarie, told CNBC's "Capital Connection."
"There is a real problem in the economy. With no reforms just yet, we see further pressure on the currency," said Idris, who expects the rupiah to hit 14,500 if the currency breaches the current support level of 14,000. In Tuesday's Asian trade, the currency was last quoted at 13,840 versus the dollar.