Mainland shares pared losses on Monday following a volatile session that saw it drop 1.6 percent as fears over reforms in the country's initial public offering (IPO) market overshadowed better-than-expected manufacturing data.
The rest of Asian equities also kicked off December lower ahead of key economic releases from the world's largest economy. U.S. third-quarter economic growth, surveys from the Institute for Supply Management and Friday's non-farm payrolls are all due this week, alongside the European Central Bank's last policy meeting of the year.
(Read more: China's shares plunge after fresh IPO rules)
Shanghai 0.6% lower
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.
(Read more: Rich Chinese to snap up property... in Japan?)
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.
Sydney 0.8% lower
Caution over the Reserve Bank of Australia's interest rate decision on Tuesday dominated trade amid Sydney shares, leading the benchmark S&P ASX 200 index to its lowest close since October 16.
"The expectations of a 25 basis-point rate cut are near zero and are unlikely to move at all in the next 12 weeks. What we will be watching for is whether the board will continue to bluff the AUD down," said Evan Lucas, market strategist at IG.
The Australian dollar rose 0.5 percent against the greenback following China's upbeat manufacturing data.
Kospi slips 0.8%
South Korean shares reversed opening gains to fall after the release of mixed economic data. November factory activity at a six-month high while inflation stayed below the 1 percent level for a third straight month.
(Read more: South Korea data equals merry Christmas shopping?)
Shipbuilders fell on profit-taking following November's strong performance. Hyundai Heavy Industries lost 2 percent while Daewoo Shipbuilding declined 3.4 percent.
Volatility in Thailand
Thailand's benchmark SET Index fell over 1 percent before paring losses to finish higher, while the baht hit a three-month low at 32.26 per dollar after anti-government protests turned violent over the weekend.
— By CNBC.com's Nyshka Chandran. Follow her on Twitter