Shanghai Composite sinks as financial, property stocks decline

Chinese shares tumbled on Monday due to a sharp selloff in the financial and property sectors, while a positive handover from Wall Street underpinned gains in the rest of Asia.

Financial stocks listed in Shanghai collapsed by the daily trading limit of 10 percent after regulators charged several brokers with illegal activities in margin trading. The losses came a day before the release of China's fourth quarter gross domestic product (GDP) on Tuesday. The report is expected to show the economy grew 7.2 percent on year, according to a Reuters poll, down from 7.3 percent in the third quarter.

Read MoreIs the China share selloff a teapot tempest?

"This is a bloodbath in Chinese equities," said Stan Shamu, market strategist at IG. "While this is putting a dent in equities in the near term, the intentions seem good as officials continue to reign in reforms and curb excessive speculation."

Meanwhile, U.S. stocks closed higher for the first session in six last week, with all three major indices closing over 1 percent higher on the back of rising crude oil prices and strong consumer price data. Wall Street is closed on Monday, and the State of the Union speech by President Barack Obama on Tuesday will be closely watched.

Global markets are also awaiting the European Central Bank's (ECB) policy decision on Thursday, when it is widely expected to announce a government bond buying plan to stimulate the euro zone.

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NIKKEI
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HSI
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ASX 200
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SHANGHAI
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KOSPI
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CNBC 100
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Shanghai 7.7% lower

Mainland shares opened down 5.5 percent and widened losses throughout the session, posting their biggest daily percentage drop in over six years, according to Reuters. On Friday, the benchmark Shanghai Composite index posted a 3 percent weekly gain.

Data released over the weekend showing new home prices fell 4.3 percent in December from a year ago sent developers like Vanke, Gemdale and China Merchants Property tumbling by the maximum daily trading limit of 10 percent each.

Read MoreChinese developers keep chin up even as prices cool

In the financial sector, Citic Securities, Haitong Securities and Everbright Securities were all down 10 percent each following the crackdown on margin lending.

Hong Kong's benchmark index closed down 1.5 percent, while the Hong Kong China Enterprises Index tumbled 5 percent in its biggest daily drop in more than three years.

Nikkei up 0.9%

Japan's benchmark index closed above the 17,000 level, recouping nearly all of Friday's 1 percent loss. The Nikkei ended the week on Friday with its third straight weekly loss.

Read MoreBOJ puts Japan bondyields on road to nowhere

Among the biggest gainers, Sony and Itochu climbed more than 2 percent each.

Sharp skidded nearly 9 percent after the Nikkei daily reported that it could reveal a net loss to the tune of "billions of yen" this financial year.

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ASX 0.2% higher

Australia's benchmark S&P ASX 200 halted a five-day losing streak, moving off a four-week low of 5,299 points hit on Friday, but the index pared gains after rallying as much as 1 percent earlier.

Copper miners outperformed, with Oz Minerals and Sandfire Resources surging 8 and 7 percent, respectively, as prices of the metal continued their rebound.

Macquarie rallied more than 5 percent after forecasting a 10-20 percent rise in full-year profit.

Kospi gains 0.8%

South Korean shares bounced back from Friday's 1 percent loss, boosted by a rally amid ship-builders. Hyundai Heavy and Daewoo Shipbuilding rallied 9 percent each.