Investing.com - Shares in Tokyo fell on Tuesday in Asia and other main indices drifted weaker as investors focused on the expected drawn-out timetable for Britain's political process to tackle talks with the European Union on a possible exit.
THe Nikkei 225 fell 0.33%. The S&P/ASX 200 eased 0.76%, while the Shanghai Composite dropped 0.09%.
Overnight, U.S. stocks fell to three and a half month lows erasing all of their gains for 2016, as losses mounted on Monday after S&P lowered the U.K.'s credit rating due to increased fears of an oncoming market deterioration in England in the wake of last week's historic Brexit decision.
The Dow Jones Industrial Average fell 260.51 or 1.50% to 17,140.24, dropping to its lowest level since mid-March. With the sharp declines, the Dow shaved off more than 850 points over the last two sessions, suffering its worst two-day sell-off since last August's Flash Crash. The S&P 500 Composite index, meanwhile, plunged 36.87 or 1.81% to 2,00.54, as eight of 10 sectors closed in the red.
Stocks in the Basic Materials, Energy and Financials industries lagged, each falling more than 2.50%. High yield stocks in Utilities and Telecommunication led, as investors looked to capitalize on dividend plays in broad risk-off trade.
The NASDAQ Composite index, the session's underperformer, lost 113.54 or 2.41% to 4,594.44, as technology stocks continued to weigh. At session-lows, all three major fell below their 200-day moving average.
In the euro area, financial stocks tumbled more than 15%, amid concerns that major banks' earnings and net margins could take a hit if the Bank of England and European Central Bank approve further easing measures in the coming months. Goldman Sachs Group Inc (NYSE:NYSE:GS), which fell 2.35 or 1.66% to 139.51, said in a note to investors on Monday that the results from last week's Brexit referendum could tip the U.K. into mild recession by early-2017.