HONG KONG - Asian markets were mixed as profit-taking Tuesday after the previous day's big losses was countered by nervousness about the political and economic situation in Europe.

Traders were also following losses on Wall Street and in European bourses while keeping an eye on central bank policy meetings in Washington and Tokyo this week, hoping for some fresh stimulus measures.

Tokyo fell 0.37 per cent by the break, Hong Kong gained 0.44 per cent, Sydney added 0.41 per cent, Shanghai was 0.94 per cent higher and Seoul shed 0.13 per cent.

Regional shares were hit on Monday after the poor showing of Nicholas Sarkozy in the first round of the country's presidential election at the weekend.

While observers are unsure who will win the run-off there are fears that if his main challenger, Socialist Francois Hollande, wins he could change strategy on dealing with the eurozone crisis.

Hollande has said he would move to renegotiate a regional fiscal pact agreed last year, shifting the focus toward growth rather than austerity, a move likely to stoke friction with other nations, including Germany.

Adding to uncertainty was news the strong showing of far-right candidates, who are opposed to the huge bailouts European nations including Greece, Ireland and Portugal have received.

The Netherlands was also thrown into turmoil when Prime Minster Mark Rutte and his cabinet resigned after his government failed to reach agreement over austerity measures to stabilise the economy.

There are now fears that the Netherlands' top-notch triple A credit rating - one of only four left in the eurozone - could be in danger.

Economic matters in the eurozone also weighed on sentiment after data showed private sector activity sank at the fastest rate in five months in April, indicating a longer recession than previously thought.

The composite Purchasing Managers Index (PMI) by research firm Markit fell to 47.4 this month compared with 49.1 in March. A score below the neutral 50-point line indicates contraction.

"The main dangers to the situation in Europe have been on display over the past couple of days," Ric Spooner, chief market analyst at CMC Markets said in a note.

"The French election campaign, weak manufacturing PMI's and Spanish 10 year bonds yields at around six per cent are all indicators that make it hard for investors to increase risk appetite," he added, according to Dow Jones Newswires.

US and European shares fell. On Wall Street the Dow sank 0.78 per cent, the S&P 500 lost 0.84 per cent and the Nasdaq slid 1.00 per cent.

And in Europe the Paris CAC 40 slumped 2.83 per cent, Frankfurt's DAX 30 lost 3.36 per cent and London's benchmark FTSE 100 shed 1.85 per cent.

In early Asian trade the euro fetched $1.3153 (S$1.6518) and 106.68 yen (S$1.6535), marginally lower from $1.3154 and 106.78 yen in New York late Monday.

The dollar was at 81.10 yen compared with 81.18 yen.

And on oil markets New York's main contract, West Texas Intermediate crude for delivery in June was up seven cents to US$103.18 per barrel while Brent North Sea crude for June gained two cents to US$118.73.

Gold was at 1,636.95 an ounce at 0250 GMT, compared with US$1,632.75 late Monday.