By Sarah Turner, MarketWatch

SYDNEY (MarketWatch) -- Many major Asia stock markets fell sharply Tuesday, paring strong year-to-date gains as Europe's political troubles forced their way back onto the agenda.

Japan's Nikkei Stock Average dropped 1.1%, South Korea's Kospi fell 0.8%, and Australia's S&P/ASX 200 lost 0.5%.

In China, Hong Kong's Hang Seng Index plunged 1.6%, while the Shanghai Composite Index lost 0.7%.

Weighing on Asian sentiment, U.S. stocks took some heavy losses Monday, as uncertainty over Europe rattled investors and triggered a steep pullback from five-year highs.

"The current flare-up in worries has to do with rising political risk in Spain and Italy," said Barclays Capital strategist Aroop Chatterjee.

"Markets have been increasingly comfortable with European risks over the past few months and are largely not positioned for this increase in political problems. The outcomes in Spain and Italy are far from certain and may represent stumbling blocks for further expansion in risk appetite," Chatterjee said.

The Hong Kong market suffered particularly heavy selling, with heavyweight HSBC Holdings PLC (HBC) -- which has a major presence in Europe -- down 2.1% amid the concerns over Italy and Spain.

European markets sold down overnight, with opinion polls in Italy showing support for easing the current austerity reforms, and a political corruption scandal plaguing Spain.

Shares of Sinopec -- formally known as China Petroleum & Chemical Corp. (SNP) -- skidded 6.9% on fears of equity dilution after announcing a $3.1 billion private share placement.

Recent gainers in the consumer, property and financial sectors also suffered losses, with Li & Fung Ltd. (LFUGY) down 1.5% and Bank of China Ltd. (BACHY) lower by 2.3%.

In mainland China trading, resource-sector firms were weak, with Crédit Agricole saying that London-traded base metals may come under pressure in the near term. Aluminum Corp. of China Ltd. (ACH) and Jiangxi Copper Co. (JIXAY) each lost 1%, while Angang Steel Co. (ANGGY) fell 0.8%.

Japanese exporters were broadly weak, having gained substantially in recent sessions. Mazda Motor Corp. (7261.TO) moved down 1.8%, Sharp Corp. (SHCAF) fell 2.9%, and Fuji Heavy Industries Ltd. (FUJHY) lost 1.5%.

Heavyweight retailer Fast Retailing Co. (FRCOY) retreated 2.7% after reporting a 5.5% drop in same-store sales at its Uniqlo chain.

Fujitsu Ltd. (FJTSY) dropped 1.8% after a Nikkei report that the firm will report a fiscal-year net loss of almost Yen100 billion ($1.1 billion), hurt by costs relating to revamping its semiconductor business.

Hitachi Ltd. (HIT) fell 6.2% as investors reacted to a lower fiscal-year outlook from the conglomerate and a 38% drop in quarterly net profit, which missed analysts' expectations.

In Australian trading, hearing-aid company Cochlear Ltd. (CHEOY) fell 6.5%, retracing recent gains, after the firm said that it returned to a profit in its fiscal first half, but at a lower level than analysts had expected.

Banks came under pressure ahead of an interest-rate decision from the Reserve Bank of Australia, with Commonwealth Bank of Australia (CBAUY) down 0.6% and Westpac Banking Corp. (WBK) off by 0.7%.

Most economists expect the central bank to keep its key cash rate on hold at 3%.

The South Korean market saw sizeable losses for tech firms, with heavyweight Samsung Electronics Co. (SSNLF) falling 1%, and chip maker SK Hynix Inc. (HXSCL) down 2.5%.

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