Mainland stocks closed lower after recording sharp gains in the last session, although small caps bucked the trend. The benchmark lost 1.14 percent to close at 3,291.53 while the Shenzhen composite shed 0.34 percent.

Asian markets closed mixed on Tuesday, with several indexes giving up early gains as mainland China stocks finished the day in negative territory. Meanwhile, the dollar slipped ahead of a congressional testimony from the new Federal Reserve chair.

The blue-chip CSI 300 fell 1.45 percent, with the materials, financials and energy sectors recording losses of more than 2 percent. Major Chinese banks saw losses of more than 1 percent, with Industrial and Commercial Bank of China closing down 3.42 percent.

The ChiNext start-up board, however, rose 0.97 percent, extending gains of more than 3 percent seen on Monday.

Mainland China markets had shone in the previous session as investors digested weekend news about the proposal to remove a two-term limit on the presidency.

Elsewhere, Hong Kong's gave up gains as mainland China markets slipped into negative territory. By 3:00 p.m. HK/SIN, the Hang Seng was lower by 0.41 percent. The financials sector pared slight gains seen earlier to trade below the the flat line: China Construction Bank declined 1.06 percent and HSBC lost 1.07 percent an hour before the market close.

Despite the broader decline, insurer AIA Group rose 3.88 percent ahead of the market close after announcing that the value of new business for the period ending Nov. 30 rose 28 percent to $3.51 billion. The metric measures expected profit from new premiums.

Meanwhile, shares of Standard Chartered were up 0.55 percent at 2:50 p.m. HK/SIN after the bank said underlying pre-tax profit rose to $3.01 billion, above the $2.978 billion average projected in a Reuters poll.

Japan's rose 236.23 points, or 1.07 percent, to close at 22,389.86, extending a 1.19 percent gain seen in the last trading session. The technology, financials and manufacturing sectors finished the session in positive territory.

Among index heavyweights, SoftBank Group advanced 0.7 percent, Fanuc Manufacturing gained 1.81 percent and Fast Retailing added 0.78 percent by the end of the day. Automakers also traded higher, with Honda Motor climbing 2.03 percent.

Across the Korean Strait, the Kospi reversed early gains to close off by 0.06 percent at 2,456.14.

Index heavyweight Samsung Electronics, which had risen by more than 1 percent following the strong showing from tech stocks stateside in the last session, finished the session flat. Chipmaker SK Hynix closed higher by 1.55 percent.

In Sydney, the S&P/ASX 200 edged up 0.24 percent to close at 6,056.9, with the financials and materials sub-indexes contributing to gains on the broader index.

Australia's "Big Four" banks were in the green, with National Australia Bank tacking on 0.76 percent and ANZ closing higher by 0.87 percent. Mining majors Rio Tinto and BHP finished the session up 1.25 percent and 0.81 percent, respectively.

MSCI's broad index of shares in Asia Pacific excluding Japan were lower by 0.27 percent by 3:23 p.m. HK/SIN.

Stateside, Wall Street got off to a strong start on the first trading day of the week, with major stock indexes rising more than 1 percent as U.S. bond yields slipped.

The Dow Jones industrial average gained 399.28 points, or 1.58 percent, to close at 25,709.27, and the and Nasdaq composite advanced around 1.2 percent.