Tokyo, returning from a public holiday Monday, lost 1.01 percent with deflationary concerns sapping confidence of recovery in Asia's top economy.

Shanghai tumbled 3.45 percent and Hong Kong slipped 1.53 percent amid concerns Beijing will tighten monetary policy after China's banking regulator warned banks must beef up defenses against bad loans.

The move represents the latest signal that Beijing is worried about risks to the country's financial system after a year of robust lending, said analysts.

Profit-taking brought Seoul lower by 0.78 percent. Sydney fell 0.68 percent.

Wall Street closed 1.26 percent higher Monday, helped by strong housing data and a weak dollar that boosted commodities and overall sentiment for risk.

TOKYO: Down 1.01 percent. The Nikkei-225 lost 96.10 points to 9,401.58. Investors pulled funds away from Japanese assets on worries over the country's growth outlook, Tachibana Securities equity strategist Kenichi Hirano told Dow Jones Newswires.

HONG KONG: Down 1.53 percent. The Hang Seng Index lost 348.25 points to 22,423.14. Tuesday's fall followed the warning from China's banking regulator over loan risk.

SYDNEY: Down 0.68 percent. The S&P/AS--200 eased 32 points to 4,685. Dealers said the market rose in early trade following positive leads from overseas but later reversed on profit-taking in mining and banking stocks.

SHANGHAI: Down 3.45 percent. The Shanghai Composite Index, which covers both A and B shares, was down 115.14 points at 3,223.53. The loss is its biggest on a single-day since August 31 due to the banking regulator's warning.

Only one out of the 28 stocks listed on the Nasdaq-style ChiNext board rose Tuesday.

SEOUL: Down 0.78 percent. The KOSPI lost 12.63 points at 1,606.42. Analysts said investors ignored the positive lead from Wall Street to take profit in banks and offload technology stocks on concerns about exchange rates amid continued dollar weakness, which hits exporters' competitiveness.

SINGAPORE: Down 0.64 percent. The blue-chip Straits Times Index closed 17.90 lower at 2,779.98.

BANGKOK: Down 2.06 percent. The Stock Exchange of Thailand (SET) composite index lost 14.19 points to close at 676.22.

KUALA LUMPUR: Up 0.10 percent. The Kuala Lumpur Composite Index gained 1.21 points to 1,272.09.

JAKARTA: Down 0.38 percent. The Jakarta Composite Index lost 9.53 points to 2,471.88.

MANILA: Up 0.87 percent. The index added 26.66 points to 3,074.66. The market was buoyed by gains on Wall Street and soaring gold prices, dealers said.

WELLINGTON: Down 0.17 percent. The NZ---50 fell 5.36 points to 3,107.61.

MUMBAI: Down 0.29 percent. The 30-share Sensex lost 49.1 points to 17,131.08.