Sentiment was hurt as the United States said it was considering taking additional steps against Chinese companies that have been supplying Russia's defence industrial sector

World stocks retreated from record highs as China signalled it would respond to the EU's tariffs on its electric vehicle makers

Losses in Japan and Hong Kong were offset by markets rallying in Taiwan and South Korea — both of which were buoyed by overnight gains on Wall Street and positive tech news.

The halt in the Asian risk rally came as Friday's non-farm payroll data underscored the resilience of the US labour market

China sat out of the global risk rally after a group of Republican lawmakers said battery companies CATL and Gotion should be banned from shipping goods to the US

Shares across Asia were boosted by advances in the euro ahead of the European Central Bank policy meeting, but pared gains amid caution

Focus in the region was on how Indian markets performed after stocks sank and the rupee slid a day before

"Although stock markets have performed strongly in May, just in the last week it seems very stressed," one analyst said, pointing to investor jitters on inflation expectations

The latest halt in the global risk rally comes on the back of data pointing to lingering inflationary pressures across major economies

Central banks were the centre of attention on Tuesday with tightening and easing on the table ahead of key data releases

Investors began the week in positive mood, betting on imminent rate cuts in the US and in Europe ahead of the release of the latest inflation figures

Investors shunned equities as the odds on a turnaround in US interest rates lengthened after the release of more strong economic data