Asian markets tumble as geopolitical fears set in

Asian markets plunged on Tuesday as geopolitical risks pile up, from US tensions with Russia and Saudi Arabia, to trade issues and Italy's budget stand-off with the European Union.

Hong Kong lost more than three percent to wipe out its gains from the previous two trading days, while Shanghai and Tokyo were more than two percent off.

The losses brought an end to a rally that was fuelled by China's top brass issuing coordinated statements of support for the country's markets and officials unveiling tax cut plans.

The advances had provided some much-needed support to Asia but investors reverted to selling on Tuesday, with nerves tested further after Donald Trump's warning that he will pull out of a nuclear treaty with Russia and bolster America's arsenal.

"Global financial markets continue to struggle to rally as various geopolitical concerns weigh on investor confidence," Nick Twidale, chief operating officer at Rakuten Securities Australia, said.

He added that with regards to China, dealers "will be very keen to see if they can maintain the stellar run that they've experienced over the last couple of days," he said.

"With the rest of the world looking much more pessimistic in the current environment there could be a firm correction on the cards." Shanghai sank 2.3 per cent, having jumped more than six per cent since Thursday's close, while Hong Kong fell 3.1 per cent in the afternoon.

Chen Jihao, partner at Gaoxi Hedge Fund in Beijing, said the words of support from Beijing would only have a limited impact and expects further selling as Chinese leaders struggle to boost the economy while fighting a huge debt mountain.

"Stocks in the past two days were like a patient, just coming out of the ICU and going straight to the nightclub -- the symptoms may have temporarily gone away, but it is far from cured, and it's only a matter of time before medicine starts to wear off," he told Bloomberg News.

"I still abide by the belief that there will be no bull market in a deleveraging process."