Asian stocks took a beating Monday with Japan and South Korea both closing almost 4 percent lower. The Shanghai and Hong Kong markets were suffering the chill of heavy snow across in China, which is disrupting energy supplies and transportation. Shanghai was down as much as 7 percent.
Markets in Australia are closed for a holiday. They will reopen Tuesday.
The U.S. dollar dipped slightly against the euro as investors nervously jockeyed into position ahead of this week's U.S. Federal Reserve meeting, at which the bank is set to cut interest rates again, having slashed them in an emergency move last week.
China's Shanghai Composite Index plunged 7.2 percent, due to slides in global equity markets and heavy snow across central and eastern China, which is seriously disrupting food and energy supplies. Although the weather is not expected to have a long-term impact on the economy or policy, analysts fear it could ensure a spike of inflation to fresh 11-year highs in January and February, complicating authorities' efforts to bring it under control through tighter policy. Flag carrier Air China plummeted over 8 percent at one point, electricity generator DatangPower and shipping giant China COSCO also lost ground.
Hong Kong stocks lost 4.3 percent, as worries over the U.S. economy helped reverse a pre-weekend rally, but coal stocks jumped after China halted coal exports to help end a severe power crisis. Weak global equities, including a steep fall in mainland stock markets, weighed on investor confidence, while concerns surfaced about the magnitude of a U.S. interest rate cut expected this week.
Singapore's FTSE Straits Times Index fell over 4 percent. Blue chips were down across the board with DBS Group sliding over 5 percent. But shares of coal mining firm Straits Asia Resources rose as much as 10.9 percent on the back of soaring coal prices.
In Tokyo, the Nikkei 225 Average closed 4 percent lower, shedding over 500 points, as poor earnings results increased fears that a slowing U.S. economy is hurting Japanese firms prompting investors to dump shares across the board. The world's second-largest steel maker, Nippon Steel, said its pretax profit in the nine months to December fell 0.7 percent, sending steel shares sharply lower.
South Korea's KOSPI also finished 3.9 percent lower in a regional selloff that pummeled technology firms, shipbuilders and brokerages, as concerns over the U.S. economy hit fragile sentiment after last week's rollercoaster market. Samsung Electronics and Daewoo Shipbuilding and Marine Engineering were both sharply lower.