HONG KONG (Nikkei Markets) -- Asian shares outside of Japan declined on Tuesday as concerns over protests in Hong Kong and worries over global trade and growth weighed on sentiment.
The Nikkei Asia300 Index of companies outside Japan declined 1.5% to 1,205.76.
Hong Kong equities paced losses across Asia on Tuesday after China condemned ongoing protests in the city. The Hang Seng Index tumbled 2.1% to a fresh seven-month low, a day after China said the demonstrations had started to show "sprouts of terrorism," and called for protesters to be punished. The demonstrations in Hong Kong against a controversial extradition bill began peacefully in July, but have in recent days turned violent.
The recent increase in violence combined with China's usage of the word terrorism to describe the protests risked that Beijing could be "more aggressive" in their response, Stephen Innes, managing partner at Singapore-based VM Markets, wrote in a note.
Additionally, investors also contended with mounting worries over a slowdown in global economic outlook amid fading prospects of a Sino-American trade deal
The three major U.S. equity indexes shed over 1% each on Monday, building on Friday's losses that came after President Donald Trump indicated that a planned trade meeting between U.S. and Chinese officials next month may not take place. Trump's remarks suggested that an immediate easing of the trade conflict was unlikely.
Fears over the economic outlook on account of the trade conflict drove yield on the 10-year U.S. Treasury note to 1.65%. The yield differential between the returns on the 10-year bond and the 2-year bond fell to near six basis points, a sign that traders are expecting economic conditions to weaken.
Hong Kong-listed Galaxy Entertainment Group was among the major losers on the A300 index. The casino operator tumbled 5.8% after reporting a 7.3% decline in net profit for the first half of the year amid lower revenue and other income.
Wheelock declined 3% after the Hong Kong-based real estate company said first-half net profit decreased 3.2% on year.
An index of Chinese companies listed in Hong Kong, the Hang Seng China Enterprises Index, slipped 1.5%. Tencent Holdings declined 1.8%, while Anhui Conch Cement lost 2.2%, and Industrial and Commercial Bank of China shed 2%.
Reliance Industries jumped 9.7% in Mumbai after the Indian conglomerate said that Saudi Aramco will acquire a 20% stake in its refining and petrochemical businesses for $15 billion.
Petronas Chemicals Group dropped 2% in Kuala Lumpur after the Malaysian company said net profit in the June quarter fell 22.3% year-on-year amid weaker product prices.
E-Mart soared 6.6% in Seoul after the South Korean retailer reportedly said it placed to sell 1 trillion Korean won ($817.8 million) worth of assets and buy back shares worth 95 billion won.
Singapore's benchmark equity index closed 0.7% lower. Singapore earlier Tuesday slashed the current year economic growth outlook to between zero and 1%, citing the weakening outlook for world growth and a sharper-than-expected downswing in the electronics industry.