Japan's benchmark Nikkei 225 gave up early gains and closed 1.1 percent lower as concerns about inflation took hold. Big property plays were among the biggest drag on the market, with Mitsui Fudosan shedding 2.5 percent. Their declines outweighed the positive effect of a strengthening dollar as the greenback touched a three-month high, that had boosted exporters such as Honda Motor and NEC initially. Softbank, Japan's third-biggest mobile phone operator ended 1 percent higher after rising as much as 4 percent in the day on news it would start selling Apple'snew iPhone in Japan from July 11.
South Korea's KOSPI ended 1.9 percent down as worries about inflation and slower growth weighed on the market. Big tech names LG Electronics and Samsung Electronics shed 2.2 percent and 2.9 percent respectively. The banking sector such as Shinhan Financial suffered afterLehman Brothers forecast unprecedented quarterly losses. Shares of shipbuilders such as Daewoo Shipbuilding fell across the board on worries that rising raw material costs may dent their profits after POSCO said it was considering hiking prices on its steel products in the third quarter. News that the country's cabinet was threatening to resign in support of protests against US beef imports, further dampened sentiment.
Australian shares lost 2.8 percent, their biggest one-day fall in almost three months. The selloff was led by financials. Macquarie Group tumbled 7.4 percent, fanned by fears of further fallout from the global credit crisis. The market was also playing catch up with steep losses posted by Asian markets in the previous session after record oil prices and the biggest jump in the U.S. jobless rate in 22 years revived worries about the health of the world's top economy.
Singapore's benchmark Straits Times Index extended Monday's losses and retreated another 1.5 percent, with bank stocks such as DBS and OCBC declining in line with the broader market.