Asian equities were mostly lower on Monday with Japanese and Shanghai shares underperforming amid rising geopolitical tensions over Ukraine.
The U.S. and Europe are expected to step up sanctions on Moscow as early as Monday after pro-Russian rebels in east Ukraine took eight European military inspectors hostage and seized the headquarters of a regional television station in the city of Donestsk over the weekend.
"The Ukrainian tensions are once again mounting and the word coming from Capitol Hill and also Europe is that sanctions on Russian officials will be harder, more direct and onerous on President Putin's inner circle; this will disrupt normal trading conditions," said Evan Lucas, market strategist at IG in a morning note.
Fed in focus
Investors will also be looking for more guidance on rates when the Federal Reserve kicks off its two-day policy meeting on Tuesday. The central bank is likely to stick to its timetable to trim its monthly bond purchases by another $10 billion.
Shanghai loses 1.6%
China's benchmark index finished at its lowest level since March 20, extending losses into a fourth straight session, after President Xi Jinping said on Friday that the current fiscal and monetary policy would remain unchanged, according to state media reports.
Investors also brushed off news that Beijing took more steps to free up its currency. Over the weekend, the country's foreign exchange regulator said it is loosening up currency controls for big companies to help them move capital more freely.
Energy producers were among the biggest losers as oil prices traded near Friday's two-week low. Guanghui Energy tumbled 10 percent while Yangquan Coal lost 4.5 percent.
Nikkei loses 1%
Japan's benchmark Nikkei ended at its lowest level in two weeks as a stronger currency overshadowed positive data with the continuing to trade on the stronger side of the 102 handle against the dollar.
Retailers declined despite data showing that March retail sales grew at their fastest pace since 1997 as shoppers indulged before the start of April's consumption tax hike. Fast Retailing lost 2 percent and Takashimaya eased 0.7 percent.
Japan Display slumped as much as 16 percent after cutting its full-year operating profit forecast by nearly 11 percent.
Honda Motor tanked 4.5 percent despite net income surging an annual 56 percent.
Australia's benchmark index managed to hit a new six-year high for the third straight session following Friday's public holiday. Meanwhile, the Australian dollar traded within sight of 93 U.S. cents after posting a 0.7 percent weekly loss on Friday.
Food company Goodman Fielder surged 15 percent after saying it received a $1.2 billion takeover offer from Singapore's Wilmar and the First Pacific Company in Hong Kong.
Kospi slips 0.1%
South Korean shares erased gains to end at its lowest levels in over a month, dragged down by a 1 percent slide in index heavyweight Hyundai Motors.
News that President Park Geun Hye accepted the resignation of Prime Minister Chung Hong Won, who quit over the government's handling of the ferry disaster, also weighed on setiment.
Emerging markets lower
Indonesian shares finished 1.6 percent lower while India's benchmark index posted modest losses.