Asian equities closed mostly lower on Monday, with the Shanghai Composite significantly paring losses amid talk that Beijing will halt its controversial market intervention.
A report by The Financial Times over the weekend said Beijing will abandon large-scale share purchases, sparking concerns over more declines for A-shares and sending Dow futures tumbling by more than 200 points in the Asian session.
Beijing may now switch its focus from intervention to stopping those it believes are "destabilizing the market," the FT report said. Suspected state firm buying has propped up A-shares in recent sessions, resulting in two straight days of 5 percent rallies in Shanghai last week.
Meanwhile, fresh commentary from Federal Reserve officials over the weekend created further uncertainty over when the U.S. central bank will finally tighten monetary policy. Fed Vice Chairman Stanley Fischer told CNBC at the Jackson Hole symposium that it was too early to tell whether the case for a September interest rate hike is compelling.
U.S. stocks saw a mixed close last week, with the S&P 500 and the Nasdaq eking out slim gains but the Dow Jones Industrial Average closed down 12 points. The S&P 500 also entered a Death Cross—often seen to indicate an impending bear market—with the 50-day moving average falling below the declining 200-day moving average for the first time since August 2011.