China's shares fell as worries about a slowing economy trumped enthusiasm for the central bank's recent rate cut, while in Australia, investors awaited a decision by the central bank on interest rates.

The Shanghai Composite was down 1.4% and Hong Kong-listed Chinese firms were down 0.8%, pulling the Hang Seng Index down 0.1%, as a surprise rate cut by China over the weekend failed to sustain gains in the market.

"The more than 60% rise in the [Shanghai] index last summer has left valuations looking stretched," said Capital Economics in a research note. The index's cyclically adjusted price-to-earnings ratio, a valuation based on the average of 10 years of earnings, of over 25 times compares with 13 times for the MSCI Emerging Market Index, it said.

Australia's S&P/ASX 200 benchmark was up 0.2%, ahead of a decision by the country's central bank on whether it should further ease monetary policy to boost a sluggish economy.

The Australian dollar was roughly unchanged at $0.7764 against the dollar, from late Monday in New York. BNP Paribas said in a research note that it expects the currency to gain if the central bank stands pat on rates.

In Hong Kong, shares of Kaisa Group surged 6.4% to 1.66 Hong Kong dollars, after the Chinese property developer moved closer to settling its debt woes by proposing a restructuring of 47.97 billion yuan ($7.65 billion) of onshore debt that would reduce its interest payment and extend tenor.

Kaisa had 12.42 billion yuan of onshore debt due to banks and another 35.55 billion yuan owed to nonbank financial institutions at the end of 2014.

In Tokyo, shares of Sharp Corp. were down 7.1% at Yen236 ($1.97) following a local Nikkei report that the electronics maker plans to request aid from two main lenders, including a Yen150 billion debt-for-equity swap. In conjunction with the swap, Sharp plans to raise around Yen30 billion through such steps as privately placing new shares, the report said.

The Nikkei Stock Average was down 0.2%.

Overnight, U.S. stocks were buoyant with the technology Nasdaq index climbing above the 5000-point level for the first time since the dot-com boom almost 15 years ago.

--Gregor Stuart Hunter and Vera Sprothen contributed to this article.

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