The Shanghai Composite fell on news that Beijing will lift its year-long freeze on stock market listings. Experts said the move could may trigger of a glut of shares into the market and drain liquidity from existing ones. The Shenzhen index tumbled 5 percent while the small-cap ChiNext was hardest hit, plunging 8 percent.
Brokerages gained on the news however, as more IPOs could translate into increased business. China Merchants Securities rallied by the daily trading limit of 10 percent while Haitong and Citic Securities rose over 5 percent each.
Meanwhile, upbeat results from HSBC's final reading of the November purchasing mangers' index (PMI) were largely shrugged off despite positive reaction from analysts.
"The whole concern about the hard landing is off the table at this point, you don't hear those words at all, which is such a big change from three or four months ago," said Michael Klibaner, regional director and head of research, China at Jones Lang LaSalle.
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Japan's benchmark index was subdued as traders took a breather following the Nikkei's stellar 9.3 percent monthly gain in November.
Dollar-yen was around 102.40, off last week's six-month high of 102.60. Investors will be watching central bank chief Haruhiko Kuroda later in the session as he is due to speak in the city of Nagoya.
Consumer electronic stocks were in focus following the results of the U.S. shopping event Black Friday. Sony rose 1.6 percent, Nintendo inched up 0.1 percent and Nikon fell 0.8 percent.