Chinese stocks led the sell-off in Asia on Monday, as declines off shore, a fall in commodity prices and questionable growth in the mainland sapped risk appetite.
Caution ahead of the Federal Reserve's two-day policy meeting also kept investors on the sideline.
Spot gold fell for a third session in Asian trade on Monday, trading not far above its lowest level since early 2010, with expectations of further losses in the metal as the Federal Reserve moves closer to raising interest rates. The precious metal eased 0.3 percent at $1,095.50 an ounce.
Meanwhile, U.S. crude for September delivery fell 14 cents at $48 a barrel and Brent crude futures for September delivery dropped 4 cents to $54.58 on the back of renewed oversupply concerns after data showed U.S. drilling activity increased last week.
Further hurting sentiment was the negative lead from Wall Street; U.S. indexes finished about 1 percent lower each on Friday as signs of slower global growth weighed on sentiment.
Shanghai Comp skids 8.5%
China's benchmark Shanghai composite index nearly quadrupled declines in the afternoon session to end sharply lower at a three-week low, as official data showed the country's industrial profits declined 0.3 percent year on year in June, compared with a 0.6 percent rise in May and 2.6 percent gain in April.
On Friday, the Shanghai bourse snapped a six-session winning streak after the preliminary China Caixin purchasing managers index (PMI) surprised markets by dropping to a 15-month low in July.
Intense selling unfolded in the energy, property and brokerage counters; China Oilfield Services, Sinopec and PetroChina closed down by the daily limit of 10 percent each, while Poly Real Estate and Gemdale also shaved off 10 percent each.
According to Fidelity Worldwide Investment, the wild rollercoaster ride that plagued mainland markets last month may not be over.
"In the short term, sentiment is still quite negative and there are concerns about what the policymakers will do next. We don't think the stock market rout is over yet [as] there are concerns on investors' minds that policymakers will come in and do something similar again," said Medha Samant, investment director of Asia equities at Fidelity Worldwide Investment.
"Although we are positive on Chinese equities from a medium to long-term perspective, we were disappointed by what we saw and we think there will be some amount of volatility given that investors remain unconvinced that authorities are going to take a back seat for now," Samant added.
In Hong Kong, the Hang Seng index tracked losses in the mainland to slump 3.2 percent, touching a 2½-week low.
GOME Electrical Appliances Holding fell more than 10 percent after the Chinese home appliance retailer agreed to buy retail assets from its controlling shareholder in deal to be settled partly by issue of new shares. GOME said it would buy retail assets from its controlling shareholder for HK$11.27 billion ($1.45 billion), in a deal to be settled by the issue of 6.2 billion new shares and warrants which are exercisable within two years into 2.5 billion new shares.
Nikkei falls 1%
Japan's benchmark index ended at a two-week low.
Major exporters traded in the red as the yen strengthened to its highest level since July 15 against the greenback. Toyota Motor fell more than 1 percent, while Nissan and Suzuki Motor eased 0.6 and 0.2 percent, respectively.
Bucking the selloff, Mitsubishi Motors elevated 5.5 percent after saying on Friday it will end production at its lone light-vehicle assembly plant in the U.S.
Canon closed down 0.8 percent before announcing a 16 percent fall in quarterly profit and a cut in its full-year earnings outlook. Financial services firm Monex Group, which was also due to release quarterly earnings late Monday, pulled back 1.5 percent.
ASX gains 0.4%
Australia's index turned positive in the afternoon session, after touching its lowest level since July 14 earlier in the day, as the resources sector enjoyed some reprieve on the back of bargain hunting.
However, Atlas Iron tumbled 70 percent to end at A$0.036 upon resuming trade on Monday. The troubled Pilbara iron ore miner requested the suspension of trade in its securities to be lifted on Friday, following its capital raising of more than $87 million.
Ten Network announced a management shake-up prior to the market open, saying that executive chairman and CEO Hamish McLennan will step down from both roles. Shares of the commercial broadcasting network reversed course to settle 2.4 percent higher.
Kospi sheds 0.4%
South Korea's Kospi index ended Monday at a two-week low, while the erased early losses to inch up 0.3 percent to 1,165.7 against the greenback. Earlier in the session, the currency touched $1,173.60 - a fresh low since June 2012.
Brokerage houses and pharmaceuticals were among the biggest losers; Hyundai Securities and Samsung Securities plunged 2.4 and 3.4 percent, respectively, while Hanmi Pharmaceutical and Hyundai Pharmaceutical tanked 7.1 and 4.4 percent, respectively.
Fortunately, large caps such as Hyundai Motor offset some losses on the back of expectations that a weaker won may help to improve exports. The carmaker climbed 4.3 percent, while its affiliate Kia Motors closed up 4.4 percent.
STI loses 1%
Singapore shares crashed to a two-and-a-half-week low, as downbeat sentiment in the region eclipsed a handful of corporate earnings.
Shares of DBS Group widened losses to 1.2 percent as markets focused on the uncertainties over the lender's second-half outlook, instead of the better-than-expected results, said Stuart Leckie, chairman of Stirling Finance. The city-state's biggest lender saw its second-quarter net profit rise 15 percent on-year to 1.117 billion Singapore dollars ($814 million), topping a Reuters' estimate of 1.06 billion.
"[Earnings were] on the high side, but i guess people were worried about what will happen over the next two quarters," Leckie said.