China second-quarter GDP rose 6.9 percent on year, better than the 6.8 percent forecast by a Reuters poll. The news comes as investors watch the world's second-largest economy for any signs of slowdown amid concerns over high debt levels.
The Chinese government is aiming for annual GDP growth this year to come in around 6.5 percent.
China markets retraced some early losses, bolstered by the release of better-than-expected economic data, but still closed lower.
News flow over the weekend from a financial policy meeting contributed partially to the sell-off, Bank of Communications International Head of Research Hao Hong said. Tighter regulation, a slowdown in financial innovation and more IPOs are expected going forward, Hong said, adding that this was likely to result in slower credit growth.
Another reason for poor sentiment was the sell-off in the ChiNext Composite — Shenzhen's start-up board. Companies making up the tech-heavy index have had a bad earnings season, Hong told CNBC. The ChiNext Composite recouped some losses to close down 1.07 percent.
However, the markets were not particularly bearish as companies with better fundamentals had already stabilized after the initial sell-off, Ample Capital Director of Asset Management Alex Wong told CNBC's "Street Signs."
In currencies, the dollar edged up after being dented by weaker-than-expected inflation data last Friday. The dollar index, which measures the dollar against a basket of currencies, traded at 95.243 at 3:36 p.m. HK/SIN.
Against the yen, the greenback was firmer at 112.54 after sinking last Friday. The dollar had traded around the 113 handle for most of last week.
As the main hurdle to more tightening from the Federal Reserve, inflation is expected to play a decisive role in central bank policy and influence macro market direction this year, said OANDA senior trader Stephen Innes in a Monday morning note.
"With less than a 50 percent December rate hike probability priced in and with no supportive Fed speak on the calendar before July 26, the dollar could struggle," Innes added.
The Australian dollar edged down to trade at $0.7808 after climbing for five straight sessions last week.
"Sentiment about China growth is going to continue to be a big influence on the currency and at the moment obviously, that's providing additional tailwinds for the Aussie," National Australia Bank head of FX strategy Ray Attrill said.
Oil prices were moderately higher after settling up around 1 percent in the last session. Brent crude futures were up 0.41 percent at $49.11 a barrel and U.S. West Texas Intermediate crude futures rose 0.37 percent to trade at $46.71.
In individual stocks, Hyundai closed down 2.27 percent following news that unionized workers at the company had voted to go on strike in reaction to a breakdown in wage negotiations. This was the sixth consecutive year that workers have voted to strike, Reuters said.
Hong Kong-listed gaming stocks traded in negative territory, with Wynn Macau down 5.16 percent and Melco International Development off 5.96 percent at 3:37 p.m. HK/SIN.
Macau stocks had fallen on concerns over how a facial recognition feature used by ATMs might hurt gross gaming revenues, Deutsche Bank analyst Karen Tang said in a note published July 13. However, stocks had priced in too sharp of a slowdown in gaming revenues, Tang added.
Local markets were also expected to turn their attention to Asian corporates due to announce results in the coming weeks.
While U.S. corporate earnings would influence sentiment in regional markets, Asian investors also awaited fresh catalysts from individual corporate earnings to drive local market movements, CMC Markets market analyst Margaret Yang told CNBC in an email.
In economic news, Singapore June non-oil exports (NODX) rose 8.2 percent on year compared to a Reuters forecast of 4.1 percent. The growth in exports was attributed to higher electronics sales.
In the U.S., stocks closed higher on Friday. JPMorgan Chase, Citigroup and Wells Fargo kicked off earnings season by posting better-than-expected earnings.
U.S. consumer prices were unchanged in June, data showed on Friday. The softer data led market watchers to believe the Federal Reserve could postpone hiking interest rates this year.
— CNBC's Huileng Tan contributed to this report.