A significant number of small-cap Hong Kong shares across sectors sold off. Greater China Professional Services tumbled by 93.81 percent and China Jicheng plunged 93.93 percent. Despite the steep falls, the Hang Seng Stock Connect Hong Kong SmallCap Index was down by just 0.22 percent.
Hao Hong, managing director and head of research at BOCOM International, told CNBC that the sell-off looked like a liquidation of positions triggered by margin call.
"It was difficult to speculate what the trigger was. The Hong Kong Exchange has denied that it proposed to delist some shell companies. Some of the companies plunging today were flagged by (the media) to have accounting issues."
Japan's Toshiba could sign an agreement for the sale of its memory chip unit to a government-led consortium as soon as Tuesday, the Nikkei reported. Western Digital, which jointly runs Toshiba's main semiconductor plant, remains opposed to the sale. Toshiba shares declined 1.74 percent to close at 293 yen each.
Australian natural healthcare company Blackmores announced that the company's chief executive officer would be leaving. The company has asked Marcus Blackmore, its director, to take on the interim CEO position. Shares of the company closed down 4.41 percent at 89.81 Australian dollars each.
In energy news, oil prices climbed for the fourth straight session even though increasing crude production and oversupply worries persisted. Brent crude futures gained 0.89 percent to trade at $46.24 a barrel and U.S. crude futures rose 0.81 percent to trade at $43.73.
In currency news, the dollar index, which measures the greenback against a basket of currencies, was a tad softer at 97.293 at 2:45 p.m. HK/SIN, compared with levels around the 97.4 handle seen in the last session.
Against the yen, the dollar strengthened to trade near a five-week high earlier in the session. The dollar/yen ceded some gains to last trade at 111.67.