Asian markets ended mostly lower Monday as caution prevailed ahead of a U.S. central bank policy meeting due early this week. Japan closed a touch lower, but South Korea shed almost 1.4 percent.
A slightly better-than-expected U.S. employment report on Friday dashed hopes of a half percentage point interest rate cut at the Dec. 11 Federal Reserve meeting, but also soothed fears that the world's biggest economy was heading into recession.
Investors were also cautious after China tightened monetary policy aggressively on Saturday. China raised the proportion of deposits banks must hold in reserve instead of lending out by a full percentage point to a record 14.5 percent, effective from Dec. 25.
Investors were dumping energy firms after U.S. crude slid below $88 a barrel, remaining shaky after Friday's 2-percent fall on worries that slower U.S. growth would crimp demand. Japan's Inpex Holdings, China's PetroChina, and Australia's Woodside Petroleum were all on the decline.
The Nikkei 225 Average fell for the first time in four sessions as investors took profits on Kyocera and other technology shares amid caution ahead of the Fed's decision on interest rates. Japan's core private-sector machinery orders, a key gauge of corporate capital spending, rose 12.7 percent in October from the previous month.
South Korea's KOSPI dropped 1.4 percent, with Samsung Heavy Industries and affiliate Samsung Fire & Marine Insurance falling on worries about their exposure to the country's worst oil spill last week.
Australian shares ended lower, slipping back after two sessions of gains as investors awaited the outcome of the U.S. Fed policy meeting. Farm chemicals group Nufarm dropped 12.1 percent after it ended talks on a potential A$3 billion (US$2.6 billion) bid from a group including China National Chemical Corp, after the consortium was unable to come up with a formal offer SP Ausnet rose 8 percent after the infrastructure firm said it had decided not to go ahead with plans to buy assets of de-listed energy firm Alinta for $7.3 billion, citing poor capital market conditions.
The Shanghai Composite Index closed 1.4 percent higher after tumbling at the open in response to the tightening of monetary policy. But shares in banks and real estate developers, potentially most vulnerable to tighter liquidity in the banking system, continued to sag.
Singapore's Straits Times Index finished largely flat after spending the morning in the red. Shares of Indonesian palm-oil producer First Resources, which raised S$247.5 million ($172 million) in its initial share offer, rose 10 percent above its issue price.
Hong Kong stocks ended 1.2 percent lower as shares in Chinese firms listed in the city fell after Beijing tightened monetary policy at the weekend.