News of a fresh North Korean missile test early Tuesday morning sent traders scurrying for safe-haven assets such as gold and bonds and sent sharemarkets around the region tumbling as investors lost their appetite for risk.

The S&P/ASX 200 had been set for a cautiously upbeat start before the fresh provocation from the rogue state, but instead sank like a stone at the open and failed to recover from there amid heavy selling in the biggest, most liquid blue-chip names.

The benchmark measure ended the session down 41 points, or 0.7 per cent, at 5669, wiping out the year's gains in the process. Close to three quarters of the top 200 names ended the session in the red.

While markets reacted swiftly as news broke that North Korea had fired a missile over Japan for the first time since 2009, with gold, bonds and the yen bid quickly higher, "the initial knee-jerk risk off move was relatively shallow and short-lived," RBC Capital Markets head of Asia currency strategy Sue Trinh said.