A batch of downbeat reports over the weekend from Europe and China undermined investor sentiment that is already fragile from downgrade of the global economic growth forecasts, unleashing a sell-off in Asian markets.
Japan's Nikkei fell 1.3 percent to 8,557.11 and Hong Kong's Hang Seng dived 2.6 percent to 19,125.09. China's Shanghai Composite Index shed 1.2 percent to 2,143.65.
South Korea's Kospi dropped 2.2 percent to 1,783.47 and Taiwan's Taiex fell 2.3 percent to 7,001.84. Australia's S&P/ASX 200 was off 1.5 percent to 4,165.50.
On Friday, stocks in Italy and Spain plunged over 4 percent and 5 percent each after another Spanish region said it might seek financial aid from the government, adding to nagging concerns about Europe's debt crisis. The euro continued its slide. It was down 0.8 percent to 94.65 yen and against the dollar it fell 0.4 percent to $1.2110.
A forecast from a Chinese central bank adviser that China's economy could wane further in the third quarter also deepened concerns about the global slowdown. China's economic growth slowed to a three-year low of 7.6 percent in the second quarter.
Investors are awaiting quarterly financial results from industry bellwethers around the world—from tech giants Apple, Amazon and Facebook, to automakers and energy firms.
Analysts said major Asian auto and tech exporters are expected to report strong earnings later this week, but their upbeat reports will likely be overshadowed by weak economic conditions that will make it increasingly tough for these exporters to sustain sales growth.
"Even though Samsung and Hyundai are expected to report strong second-quarter earnings, their share prices are falling because of external economic conditions," said Shawn Oh, a Seoul-based analyst at Daishin Securities.
Major Asian economies from Japan to South Korea are feeling the pinch from Europe's debt crisis and its repercussions around the world. Economic uncertainty and Europe's inability to resolve its debt woes are posing downside risks to growth and to corporate earnings in Asia and other regions.
Samsung Electronics Co., which tipped a record operating profit earlier this month, fell 2.7 percent. It releases full results on Friday. Hyundai Motor Co., which reports earnings Thursday, dropped 2.2 percent.
Benchmark crude for September delivery was down $1.54 to $90.29 a barrel in electronic trading on the New York Mercantile Exchange.
In currencies, the dollar fell 0.4 percent to 78.17 yen.