Chinese shares took another tumble on Tuesday amid persisting worries about the health of the world's second-biggest economy.
Other bourses in the region also wobbled as cautious sentiment prevailed ahead of the Federal Reserve's highly-anticipated meeting, alongside other risk events such as a sudden leadership change down under.
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.
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 ($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.
ASX tanks 1.5%
Australia's 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.
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."
Nikkei gains 0.3%
The central bank also cut its assessment of exports and factory output. BOJ Governor Haruhiko Kuroda will hold a news conference at 3.30pm local time to explain the policy decision.
Food-related counters were the day's top performers; Itoham Foods Inc and Yonekyu climbed 2.4 and 9.7 percent respectively, after a report by the Nikkei business daily said both companies are planning an operational merger that would create the country's biggest vendor of ham and sausage.
Among decliners, Toshiba closed down 1.8 percent after the troubled conglomerate reported an April-June operating loss of 10.96 billion yen ($91 million) after the market close on Monday, compared with a 47.7 billion yen profit a year earlier.
Telecommunication operators remained under selling pressure following Monday's local media reports which said that Prime Minister Shinzo Abe has instructed the communication ministry to lower mobile phone fees. KDDI led losses in the sector with a 5.7 percent plunge, while SoftBank and NTT DoCoMo eased more than 2 percent each.
Ebara Corp lost 4 percent after Credit Suisse downgraded its stock rating to 'neutral' from 'outperform.'
Kospi adds 0.3%
South Korea's Kospi index made a late-day push to close up modestly.
Cheil Industries resumed trade after changing its name to Samsung C&T Inc following a merger. The company makes up 2.5 percent of the main bourse's market value, ranking it the fourth biggest company, according to Reuters. Shares of Samsung C&T closed up 2.8 percent to 163,000 .
Rest of Asia
Malaysian shares extended gains into a second straight day, up 0.46 percent at the close, thanks to the slew of measures announced on Monday by Prime Minister Najib Razak to support a faltering economy.
Singapore's Straits Times index notched down to close down 1.0 percent, as traders remain on tenterhooks amid uncertainties over China's economy and monetary policy in the U.S.
On the domestic data front, the second-quarter jobless rate in the Southeast Asian city-state was unchanged from the preliminary estimate of 2.0 percent. Meanwhile, Morgan Stanley upgraded Singapore to "most-preferred market" status in the Southeast Asian region, citing potential restructuring in government-linked companies and valuations.