The Turkish lira traded at 6.6150 at 2:54 p.m. HK/SIN, after trading at the 6.9 handle earlier in the session and touching a record low on Monday. The currency had pared some of its recent losses overnight after the Turkish central bank moved to calm market nerves.
"The efforts announced by the Turkish central bank to stabilize the TRY (Turkish lira) appear to have assisted. The TRY has not endured further depreciation in overnight trade, but it has not substantially declined either," Richard Grace, chief currency strategist at Commonwealth Bank of Australia, said in a morning note.
"Emerging market tensions will not evaporate, but they may subside for now," Grace said, adding that volatility in emerging market currencies could pick up down the road given expectations for the Federal Reserve to raise rates next month.
The lira dropped 20 percent on Friday when tensions between the U.S. and Turkey increased last week. That came after no progress was made on the detention of U.S. pastor Andrew Brunson, who is charged with supporting a group blamed for an attempted coup in 2016 against the government of President Recep Tayyip Erdogan.
There has largely been consensus that contagion risk from Turkey's economic woes wasunlikely to be significant for markets elsewhere, including those in the emerging space.
"This risk to EM (emerging market) contagion is sentiment, not fundamental," said David Lafferty, chief market strategist at Natixis Investment Managers, in a note.
"Turkey has limited trade and economic ties to other EMs. However, market reaction can throw the baby out with the bathwater as we see with other fragile EMs like Argentina and Hungary, who both saw steep currency losses in sympathy with the lira," he added.
Wall Street slipped in the last session, with investor sentiment wobbly as a financial crisis in Turkey played out, although those losses had been relatively measured.
The Dow Jones Industrial Average slipped 0.5 percent, or 125.44 points, to close at 25,187.70, logging its fourth straight finish in negative territory. Other major U.S. indexes also finished the day with slight declines.
In Asian corporate news, Taiwanese contract manufacturer Foxconn (or Hon Hai Precision Industry) on Monday reported second-quarter net profit came in at 14.49 billion Taiwan dollars ($567.25 million), Reuters reported. That was below an average estimate of T$21.94 billion in a Reuters poll. Shares closed down 2.98 percent for the day.
Meanwhile, in Hong Kong, shares of Sunny Optical plunged 24.07 percent by 3:03 p.m. HK/SIN after the company announced first-half results on Monday. Revenue for the period rose 19.4 percent to 11.98 billion yuan ($1.74 billion) and net profit increased 2.5 percent, while net profit margin decreased.
In currencies, the dollar index, which tracks the U.S. currency against a basket of currencies, last traded at 96.226.
Also of note, the Indian rupee dropped to a record low on Tuesday, crossing the 70 level earlier in the day and hitting a new low. The currency traded at 69.88 to the dollar at 3:20 p.m. HK/SIN. Reuters quoted Subhash Chander Garg, the country's economic affairs secretary at the ministry of finance, saying that the currency's decline was due to external factors.
— CNBC's Fred Imbert contributed to this report.