Asian stock markets declined Tuesday as concerns over Spain and U.S. economic growth re-emerged while the intensifying tensions between China and Japan also weighed.

Japanese benchmark Nikkei declined 0.39 percent or 35.62 points to 9123.77, Hong Kong's Hang Seng fell 0.30 percent or 61.51 points to 20596.60 and Chinese Shanghai Composite plunged 0.91 percent or 18.96 points to 2059.54 while India's BSE Sensex fell 0.30 percent and South Korean KOSPI Composite gained 0.13 percent.

Market sentiment was subdued during Asian hours as a disappointing survey of New York manufacturers and concerns over euro zone debt crisis weighed on the sentiment. Data released Monday showed that the U.S. Empire State manufacturing index, a widely followed statistic that tracks business activity of manufacturers in New York State, fell to a 3.5 year low of negative 10.41 in September from negative 5.85 in the previous month.

"Following the actions by the ECB and Fed, investors started to question if the easing can revive global growth. This, alongside the disappointing US data and the lack of request from Spain for an official bailout, weighed sentiment further," said a note from Credit Agricole.

Spanish 10-year bond yields bounced back quickly to around 6 percent Monday as the euro zone's fourth largest economy is yet to make a formal request for assistance from the European Central Bank (ECB).

"Rising bond yields may force Spain into asking for aid and submitting to the ECB's conditions for granting it. If "markets see that Spain will not" ask for assistance, "then it will not last long before spreads will rise again, and then Spain will be somewhat forced to come back on its decision and submit to the conditionality program," European Central Bank Governing Council member Luc Coene said at a panel discussion in London Monday, Bloomberg reported.

Meanwhile, the relationship between China and Japan took a bad turn after Tokyo said last week that it would buy the East China Sea islands claimed by both countries. The purchase of the islands for 2.05 billion yen ($26 million) was approved by Japan's cabinet on Sept 11. Market participants worry that the dispute over these islands, called Senkaku in Japan and Diaoyu in China, could result in a trade fight between the two Asian economic powerhouses.

Japanese stocks ended lower, as gains from blue chip companies were offset by declines in automakers. Companies such as Toyota Motor Corp, Honda Motor Co and Nissan Motor Co have stopped production at certain plants in China and asked Beijing to make sure that Japanese businesses are provided the required safety.

Toshiba Corp. gained 2.31 percent and Sony Corp. surged 4.48 percent while Nissan Motor Co Ltd. slumped 5.01 percent and Honda Motor Co Ltd fell 2.51 percent.

In Hong Kong, Guangdong Investment Ltd. gained 2.39 percent and Sino Land Co advanced 0.85 percent while Dongfeng Motor Group Co Ltd. plunged 4.78 percent.

In Seoul, LG Display Co Ltd advanced 1.23 percent and Samsung Electronics Co Ltd fell 1.03 percent while Kia Motors Corp declined 1.05 percent.

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