Mainland indices slide
China's Shanghai Composite index jolted lower in the afternoon trading session to close down 3.55 percent at a two-and-a-half-week low.
Among China's other indexes, the CSI300 Index — which tracks the largest listed companies in Shanghai and Shenzhen — eased 4 percent. The smaller Shenzhen Composite nearly doubled losses to 5 percent, ending at a near seven-month low. The ChiNext start-up board also receded more than 5 percent, extending Monday's 7.5 percent sell-off which took it down below the key 2,000 level.
Hong Kong's Hang Seng index dipped 0.3 percent ahead of the city's second-quarter gross domestic product (GDP) due for release after the market close.
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Disappointing economic indicators, such as fixed-asset investment and industrial production, over the weekend had suggested further cooling in the world's second-biggest economy that will likely prompt the government to roll out more support measures. However, markets were unconvinced that further stimulus was on the way.
"Normally, expectations of more growth boosting action would lead to demand for smaller and speculative stock, like the ChiNext or Shenzhen Composite Index, but today, market participants were probably not convinced that there will be a big plan in the pipeline," IG's market strategist Bernard Aw wrote in a note.
The declines also came as the China Securities Regulatory Commission (CSRC) said late Monday that the government's clean-up of illegal margin financing has had limited impact on the equity market, the securities regulator said in a statement posted on its Weibo account.
Data from the Ministry of Finance also showed China's fiscal spending jumped 25.9 percent in August from a year earlier, underscoring Beijing's spending spree in a bid to shore up the faltering economy. Meanwhile, a Reuters report said Beijing has seized up to 1 trillion yuan ($157 billion) from local governments who failed to use their budget allocations, as it looks for ways to spend its way out of an economic slowdown.
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ASX tanks 1.5%
Australia's S&P ASX 200 index ended at a one-week low as a sudden change in the country's leadership dented sentiment for the local share market. The ruling Liberal Party voted out Tony Abbott late Monday in favor of longtime rival Malcolm Turnbull.
Meanwhile, the Reserve Bank of Australia (RBA) said the weak economic growth numbers for the second quarter were not a surprise and members noted a number of activity indicators had shown some improvement in recent months, according to the central bank's meeting minutes released Tuesday. The RBA held interest rates unchanged at 2 percent early September.
Losers significantly outnumbered gainers, with financials leading declines. National Australia Bank, Westpac and Australia and New Zealand Bank plunged more than 2 percent each.
In the resources sector, market bellwether BHP Billiton eased 1.3 percent, while other miners such as Rio Tinto and South32 closed down 2.2 and 7.5 percent respectively.
Bucking the downtrend, television broadcaster Seven West Media rallied 6.5 percent after announcing a share buyback.
In Asian trade, the Australian dollar touched a more than two-week high of $0.7160 against the dollar, before paring gains to last trade at $0.7131. But Christoffer Moltke-Leth, director of global sales trading at Saxo Capital Markets, expects further gains ahead for the local currency.
"It will go up to $0.72-0.73 over the next few days... [on the back of] hopes that the new leadership could lead to better consumer confidence and also some [expectations] for China to roll out more stimulus," Moltke-Leth told CNBC's "Street Signs Asia."