Most Asian indexes gave up the previous session's gains and then some, as fears about the strength of the U.S. financial markets and the fallout from rising inflation upset market sentiment.
In Japan, the benchmark Nikkei 225 Stock Average slid 2.5 percent, to 13,033.10 — its lowest close since April 16.
Sumitomo Mitsui Financial Group, Inc. and Resona Holdings, Inc. both plunged 4.1 percent. Nomura Holdings Inc., Japan's biggest broker, retreated 4.6 percent.
Japanese exporters succumbed to a weakening dollar, which traded at 106.34 yen late afternoon Tuesday, down from 107.14 yen Monday in New York. A stronger yen reduces the value of sales repatriated from abroad.
Toyota Motor Corp. dropped 1.2 percent and Sony was off 4.1 percent.
In Hong Kong, the blue-chip Hang Seng Index lost 3.2 percent to close at 21,220.81.
Bucking the trend, China's shares rose for a second day, with news that the government was postponing a resource tax, lifting coal producers. Hopes for an Olympics-led tourism boost pushed up airline stocks. The benchmark Shanghai Composite Index rose 0.8 percent to 2,814.95 points.
Shares in midsize producer Anhui Hengyang Coal Ltd. rose by the full daily limit of 10 percent. China Shenhua Energy Corp., China's biggest coal producer, rose 3 percent.
Airlines also were higher, adding to recent gains on investor expectations of strong tourism growth for August's Beijing Olympics. Air China Ltd., the country's No. 2 carrier by passenger numbers, rose 6.8 percent. Industry leader China Southern Airlines Corp. rose 2.2 percent.
Elsewhere:
Australia's S&P/ASX 200 slipped 1.4% to 4,932.90.
South Korea's Kospi slumped 2.9% to 1,533.47.
Taiwan's Weighted index fell 3.9% to 7,051.85.
with files from other wire services
