Asian markets were in the doldrums on Tuesday, following the lower close on Wall Street and as markets digested the impact of diplomatic tensions between Qatar and other Middle Eastern nations.

Japan's benchmark Nikkei 225 (Nihon Keizai Shinbun: .N225) index declined 0.61 percent.

The S&P/ASX 200 (ASX: .AXJO) tumbled 1.02 percent, driven by broad declines in the utilities, financials and energy sub-indexes. Major banking and resource stocks traded in the red.

Markets in China were marginally lower, with the Hang Seng Index (Hong Kong Stock Exchange: .HSI) off by 0.04 percent. The Shanghai Composite (Shanghai Stock Exchange: .SSEC) shed 0.2 percent and the Shenzhen Composite inched down by 0.03 percent.

South Korean markets are closed for Memorial Day.

The subdued performance in the markets overnight could be due to investors awaiting bigger news due later in the week, National Australia Bank Currency Strategist Rodrigo Catril suggested in a Tuesday morning note.

"It has been a quiet overnight session ahead of what could be a stormy Thursday, with the European Central Bank, U.K. election and (James) Comey's testimony all occurring on the same day," Catril said.

Oil prices erased earlier gains to edge lower. Prices had fallen almost 1 percent overnight following news that Saudi Arabia and other countries in the Middle East had severed diplomatic ties with Qatar . Qatar is the world's largest liquefied natural gas (LNG) exporter .

Brent crude shed 0.65 percent to trade at $49.15 and U.S. West Texas Intermediate crude was off by 0.63 percent to trade at $47.10.

Down Under, Australia's balance of payments reflected a A$3.1 billion ($2.31 billion) current account deficit, wider than expected. Ahead, the Reserve Bank of Australia is scheduled to review interest rates at 12:30 p.m. HK/SIN with analysts widely expecting it to hold steady at a record low 1.50 percent for the cash rate.

The Australian dollar (Exchange: AUD=) declined after gaining on the back of the news about Qatar as disruptions in the latter's LNG supply could potentially benefit Australian LNG exports, analysts suggested. The Aussie, which fetched as high as $0.7488 earlier in the session, traded at $0.7465 following the release of first quarter balance of payments. Aussie dollar traded at $0.7461 at 9:36 a.m. HK/SIN.

First quarter GDP due later this week is likely to influence the direction of the Aussie dollar more than the Reserve Bank of Australia's decisions due today, said Commonwealth Bank Senior Currency Strategist Elias Haddad.

"Towards the end of the year, we expect the Australian dollar to edge higher towards $0.76, $0.7650," Haddad added.

The dollar (New York Board of Trade (Futures): =USD) edged lower against a basket of six major currencies, off the seven-month low seen last Friday. The dollar index traded at 96.668 at 9:38 a.m. HK/SIN.

The British pound (Exchange: GBP=) hit a ten-day high in the overnight session ahead of the U.K. election later this week , fetching as much as $1.2908 compared to levels around the $1.28 handle seen last week. Cable last traded at $1.2918.

Stateside, stocks in the U.S. closed the session lower after hitting record highs before the weekend.

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