U.S. markets closed lower on Tuesday after a volatile session, shedding early gains. The materials and energy sector weighed on the indices, extending the decline for a third day, as commodity and oil prices declined. The DOW JONES index lost -0.15%, 27 points, closing at 17,613.68. The S&P 500 declined by -0.26% with a final quote of 2,023.03.

Chinese stock markets reversed gains as the rally seems to lose momentum. Hong Kong's Hang Seng lost -0.26% with a final quote of 24,153.92 points. China's Shanghai Composite closed at 3,223.25 points, a decline by -0.37%. Foreign investors sold shares on a net basis for a second day.

Japan's Nikkei dropped sharply by 1.71% closing at 16,795.96 points as oil continued to slide weighing on oil-related shares. A record USD812 billion budget approved by Japans cabinet to support growth was could not support the stock market. Japan's finance Minister Taro Aso called for a drastic fiscal reform to balance budget by 2021. Preliminary Machine Tool Orders declined to +33.8% in December from a previous reading of +36.6% in November. Markets await data on Core Machinery Orders due late in the day at 23:50 GMT.