Asian markets traded narrowly mixed on Tuesday, following the lower close on Wall Street and as markets digested the impact of diplomatic tensions between Qatar and other Middle Eastern nations.
Japan's benchmark index extended losses to close down by 0.95 percent or 190.92 points at 19,979.90.
The S&P/ASX 200 tumbled 1.52 percent or 87.367 points to close at 5,667.5, driven by broad declines in the utilities, financials and energy sub-indexes. Major banking and resource stocks traded in the red.
Markets in greater China were in the green. Hong Kong's erased earlier losses to trade higher by 0.54 percent. The closed 0.35 percent or 10.6756 points higher at 3,102.3317 and the Shenzhen Composite gained 0.548 percent or 9.8691 points to finish the session at 1,810.8016.
South Korean markets are closed for Memorial Day.
The subdued performance in the markets overnight could be due to investors awaiting bigger news due later this week, National Australia Bank Currency Strategist Rodrigo Catril suggested in a Tuesday morning note.
"It has been a quiet overnight session ahead of what could be a stormy Thursday, with the European Central Bank, U.K. election and (James) Comey's testimony all occurring on the same day," Catril said.
Markets also continued to digest the news that Saudi Arabia and other countries in the Middle East had severed diplomatic ties with Qatar. Qatar is the world's largest liquefied natural gas (LNG) exporter.
Despite Qatar's position, BMI Research said in a note that there was "little risk" to pricing and trade flows in the LNG markets, due to the low risk of disruption to transit routes.
Brent crude was higher by just 0.08 percent to trade at $49.51 a barrel, reversing losses earlier in the session. U.S. West Texas Intermediate crude rose 0.06 percent to trade at $47.43.
"Oil prices initially rallied on geopolitical tensions but fell towards Friday lows after markets reassessed that Qatar is a small crude producer," Mizuho Bank Strategist Weiliang Chang said in a note. He highlighted concerns that mistrust between Iran and other Gulf countries could potentially result in "reduced compliance with (OPEC) output cuts."
Meanwhile, shares of China Evergrande Group were up 5.03 percent after the company said it would redeem perpetual bonds ahead of time. Moody's had earlier revised the company's ratings outlook from negative to stable.
Down Under, Australia's balance of payments reflected a A$3.1 billion ($2.31 billion) current account deficit, wider than expected. The Reserve Bank of Australia held the cash rate unchanged at a record low 1.50 percent, as expected.
The Australian dollar gained slightly after the RBA's decision to keep cash rates unchanged. Aussie/dollar traded as high as $0.7496 after the decision was announced — compared to a high of $0.7482 seen ahead of the decision. The Aussie traded at $0.7477 at 3:05 p.m. HK/SIN.
First quarter GDP due later this week is likely to influence the direction of the Aussie dollar more than the Reserve Bank of Australia's decision, said Commonwealth Bank Senior Currency Strategist Elias Haddad.
The dollar sank against a basket of six major currencies: The dollar index traded at 96.569 at 2:30 p.m. HK/SIN, after hitting a seven-month low earlier in the session. The greenback was also weaker against then yen, with the dollar/yen falling to trade at 109.69 compared to levels around the 110 handle seen last week.
The hit a ten-day high in the overnight session ahead of the U.K. election later this week, fetching as much as $1.2908 compared to levels around the $1.28 handle seen last week. Cable last traded at $1.2921.
Stateside, stocks in the U.S. closed the session lower after hitting record highs before the weekend.