Stocks in Asia were mostly lower on Tuesday as fresh concerns over a slowing Chinese economy and renewed trade tensions weighed on investor sentiment.
Mainland Chinese markets slipped as investors kept an eye on Beijing's ongoing trade war with Washington. The Shanghai composite declined 0.1 percent to close at 2,594.25 and the Shenzhen component slipped 0.504 percent to finish its trading day at 7,551.30. The Shenzhen composite fell 1.114 percent to close at 1,300.34.
Meanwhile, Hong Kong's Hang Seng index shed 0.26 percent in its final hour of trading.
Japan's Nikkei 225, however, recovered from earlier losses to close fractionally higher at 20,664.64 while the Topix index gained 0.1 percent to finish at 1,557.09, as shares of Japanese conglomerate Softbank Group bounced 1.54 percent. South Korea's Kospi also made a turnaround to close higher by 0.28 percent at 2,183.36.
The in Australia slipped 0.53 percent to close at 5,874.2. The heavily weighted financial subindex declined 1.67 percent as shares of Australia's so-called Big Four banks saw losses. Australia and New Zealand Banking Group fell 2.33 percent, Commonwealth Bank of Australia slipped 1.64 percent, Westpac shed 2.28 percent while National Australia Bank declined 1.94 percent.
US seeks extradition of Huawei CFO
The U.S. Department of Justice filed filed criminal charges on Monday to officially request the extradition of Meng Wanzhou, the chief financial officer of Chinese telecommunications giant Huawei.
The Justice Department also announced charges Monday against Huawei for allegedly stealing trade secrets from T-Mobile. The charges stem from a civil trade secrets lawsuit filed by T-Mobile in 2014 over a robot called "Tappy," which was used in testing smartphones.
"Huawei and its senior executives repeatedly refused to respect U.S. law," said FBI Director Christopher Wray. "Huawei ... systematically sought to steal valuable trade secrets."
Meng, who is also the daughter of Huawei's founder and president Ren Zhengfei, was arrested on Dec. 1 in Vancouver. Her arrest sparked a series of tense exchanges between China and Canada over the possibility that she could be transferred to the U.S.
"The timing is certainly interesting given the upcoming discussions this week in D.C., but I think we have to take a step back and view this as part of a larger effort within the Justice Department, in particular, to focus on what it sees as misbehavior on the part of Chinese firms and individuals in the United States for a variety of reasons," Robert Williams, executive director at the Paul Tsai China Center in Yale Law School, told CNBC's "Squawk Box" on Tuesday.
A spokesperson at China's industry and information technology ministry said Tuesday that the U.S. government indictment against Huawei was "unfair" and "immoral," Reuters reported. The foreign ministry of China also appealed to the U.S. to stop "unreasonable suppression" of Chinese companies, according to Reuters.
The latest development came ahead of a new round of high level trade negotiations between the two economic powerhouses locked in an ongoing trade war.
Chinese state-run Xinhua News Agency reported that Chinese Vice Premier Liu He arrived in Washington D.C. on Monday for economic and trade talks. Chinese central bank governor Yi Gang is also part of Liu's delegation to the U.S., according to the report.
The Chinese delegation will be accompanied by a team from Washington led by U.S. Trade Representative Robert Lighthizer, with negotiations set to take place on Wednesday and Thursday.
"I don't think we can say that this is directly tied to the trade negotiations in that kind of transactional way. That's just not the way the U.S. law enforcement system works, it's not the way the Justice department works. These criminal investigations began long before the current trade negotiations. So I think we have to view it in that context," Williams said.
Fresh concerns over China's economy
In overnight market action on Wall Street, the Dow Jones Industrial Average shed 208.98 points to close at 24,528.22 while the slipped 0.8 percent to finish its trading day at 2,643.85. The Nasdaq Composite declined 1.1 percent to close at 7,085.68.
The losses stateside were led by weak guidance from Caterpillar and Nvidia, which stoked fears about the Chinese economy slowing even as Beijing has been seeking to stimulate an economy which has shown signs of slowing growth.
Caterpillar, considered a bellwether for global trade given the company's exposure to overseas markets, cited lower demand in China for its decline in sales in the Asia Pacific region.
Chipmaker Nvidia, meanwhile, said "deteriorating macroeconomic conditions, particularly in China," impacted demand for its graphics processing units.
Currencies
The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 95.706 after seeing an earlier session high of 95.796.
The Japanese yen, a safe-haven currency, traded at 109.26 against the dollar after touching lows around 109.5 yesterday. The Australian dollar changed hands at $0.7167 after seeing an earlier low of $0.7136.
— Reuters and CNBC's Kate Fazzini and Fred Imbert contributed to this report.