- Stocks in major Asian markets were largely positive.
- The mainland Chinese markets rebounded from losses on the back of comments from the country's securities regulator.
- Wall Street declined overnight, following a report that said Washington is planning to levy tariffs on more Chinese products if upcoming talks between the two countries' presidents fail.
Stocks in Asia were mostly positive on Tuesday as mainland Chinese stocks saw a rebound following supportive comments from a regulator.
The rose 1.02 percent to close at around 2,568.05 while the Shenzhen composite advanced 0.939 percent to finish at about 1,276.45 after a negative start to the day's trading session.
The moves in mainland Chinese stocks came after the country's securities regulator said it would improve market liquidity and guide more long-term capital into the market. The China Securities Regulatory Commission also said it will encourage share buybacks and mergers and acquisitions by listed firms, reduce unnecessary interference in trading, and create a level playing ground for investors.
"From the currency point of view, this simply means that fiscal policy is, you know, more expansionary. And of course, this raises a bit of concern ... that China's fiscal deficit will widen further. So, again, this adds one more line to the growing list of negatives for the currency," Koon How Heng, head of markets strategy at United Overseas Bank, told CNBC's "Street Signs" in response to the regulator's comments.
As Chinese markets have suffered a rough October, investors have also been closely watching the country's currency. On Tuesday afternoon during Asian trade, the was at 6.9656 against the greenback, after the People's Bank of China fixed the currency's mid-point at 6.9574 per dollar — which was the lowest guiding level since May 21, 2008, according to Reuters.
Meanwhile, Hong Kong's Hang Seng index slipped 0.71 percent in afternoon trade.
Overnight on Wall Street, stocks closed lower following a Bloomberg News report that said the United States is preparing new tariffs against all remaining Chinese imports if trade talks between Presidents Donald Trump and Xi Jinping fail to reconcile the ongoing trade dispute.
Both countries have already implemented levies on billions of dollars worth of each other's goods.
"The trade war between the US and China looks set to escalate over the next few months and its overall influence on global markets remains as one of the most important factors influencing investor sentiment," Rakuten Securities Australia said in a morning note.
"Investors will continue to monitor the situation closely over the coming sessions and indeed in the run up to next year as the two biggest world economies bash heads and the fall out hits the rest of the world," they said.
For investors, the value of Monday's report is that it offers clues to the timing of the next step in the trade war, according to one economist.
"That the remaining $257bn (give or take) of Chinese exports to the US would eventually be subject to tariffs if no trade deal was found, is not news. We have known this for months. What we did not know exactly, was when these would be implemented. Now, it looks like we can pencil in some rough dates into the calendar," Robert Carnell, ING's chief economist and head of research for Asia Pacific, wrote in a Tuesday note.
Despite the jitters about the trade war, most of Asia's major markets looked positive on Tuesday.
In Japan, the gained 1.45 percent to close at 21,457.29 while the Topix index advanced 1.38 percent to 1,611.46 by the closing bell. That followed positive news on Japan's economic front: Government data showed that the seasonally adjusted unemployment rate fell to 2.3 percent in September from 2.4 percent in August.
Still, domestic economic data only has a marginal impact on Japan's stock markets because so many companies derive most of their earnings from overseas activities, according to Jesper Koll, head of Japan at exchange traded product firm Wisdomtree.
Down Under, the benchmark ASX 200 recovered to close 1.34 percent higher at 5,805.1, with most sectors seeing gains. Energy stocks rose 0.83 percent and materials advanced 1.22 percent.
The heavily weighted financial subindex was up by 1.66 percent as shares of Australia's so-called Big Four banks rose.
South Korea's Kospi, meanwhile, rose 0.93 percent to close at 2,014.69 following a statement from the country's financial authorities calling for measures to stabilize the markets.
Shares of Samsung Electronics and SK Hynix also jumped 2.29 and 2.1 percent, respectively. The move in the stocks of the chipmaking giants came following a decision in the U.S. to restrict exports to Chinese chipmaker Fujian Jinhua Integrated Circuit.
The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 96.705 in the afternoon after seeing lows around the 96.3 handle in the previous session.
— Reuters and CNBC's Fred Imbert and Thomas Franck contributed to this report.