Asia falls on weak US jobs growth but China bucks trend

Asian stocks pulled back from last week's highs on Monday following a tepid U.S. jobs report but positive Chinese economic data over the weekend capped larger losses.

Japan's Nikkei index skidded 1.4 percent, Australia's S&P ASX 200 hovered around 5,110 points in cautious trade and South Korea's Kospi ended below 1,920 points. The Shanghai Composite bucked the trend however, to hit a new two-week high.

(Read more: This week in Asia, watch China data and central banks)

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US data in focus

Friday's closely-awaited U.S. jobs figure came in worse-than-expected. The U.S. economy created just 162,000 nonfarm payroll jobs in July after a downwardly revised 188,000 in June. Still, Wall Street ended modestly higher with the S&P 500 and Dow hitting new closing highs.

While the data was disappointing, experts said that it still showed job growth and may also make the Federal Reserve more hesitant about curtailing its bond purchases in September.

(Read more: Escape velocity hopes give way to law of gravity)

Nikkei down 1.4%

A stronger Japanese yen overshadowed upbeat corporate earnings results, resulting in the Nikkei pulling back from Friday's one-week high. Dollar-yen traded around 98.40, down from Friday's high of 99.95 and that weighed on machinery stocks.

Toyota Motor lost 1 percent each after rallying 1 percent earlier in the session after reporting robust quarterly profits on Friday, but issued a cautious stance on its profit outlook. Meanwhile, Isuzu Motors also lost 1 percent after the Nikkei newspaper said that it's operating profit may have jumped 50 percent for the April-June quarter.

(Read more: Not seen in a while: raft of earnings surprises in Japan)

Ship maker Hitachi Zosen closed down nearly 6 percent after reporting that it's operating loss widened from the previous year.

Shanghai up 1%

China's benchmark index rose to its highest levels since July 23 on optimism of an economic rebound. Data released over the weekend showed an improvement in China's services sector. Non-manufacturing purchasing manager's index (PMI) rose to 54.1 in July, well above the key 50 level that demarcates expansion from contraction.

Shipbuilders rallied with China State Shipyard and Guangzhou Shipyard higher by 6.5 percent and 7.6 percent, respectively after the government said that the sector could see some consolidation that may benefit big firms at the expense of smaller ones.

(Read more: China data may wrong-foot oil bears)

Local dairy producers Royal Dairy and Xinjiang Western Husbandry rallied 7 and 10 percent, respectively following news that China has halted milk powder imports from Australia and New Zealand.

Sydney slips 0.1%

Australia's benchmark index retreated from last week's two-and-a-half-month high of 5,116 points as investors digested Prime Minister Kevin Rudd's decision to set a date for general elections and ahead of Tuesday's Reserve Bank of Australia (RBA) meeting.

"The election is one week ahead of the original date, which makes no difference to the market. As far as we can see, what will increase volatility is the prospect of another hung parliament. Current polling suggests both major parties are neck and neck. If this does eventuate on polling day, another three years of cautious trade could be on the cards," said Evan Lucas, market strategist at IG in a note.

Virgin Australia fell 3 percent after announcing that it expects to report an annual net loss for the first half of the year. Meanwhile, Paladin Energy fell 28 percent after completing a bookbuild for a private share placement.

Retail sales for the month of June came in flat from the previous month, below forecasts for 0.4 percent monthly rise. The weaker-than-expected results sent the Australian dollar briefly skidding to a new three-year low at $0.8846.

(Read more: Here are other ways to play the weak Aussie trade)

Meanwhile, New Zealand's biggest dairy producer, Fonterra, finished 3 percent lower following an earlier 9 percent tumble after announcing that it's whey protein concentrate has been contaminated.

Kospi 0.4% lower

South Korea's benchmark index was weighed down by a 0.9 percent fall in Samsung Electronics after the U.S. government reversed a ruling that had favored Samsung over Apple in their long-running patent battle.

Exporters reversed early losses to gain momentum from a stronger yen, which makes South Korean exports more price-competitive. LG Electronics added 2 percent.

(Read more: If US is rebounding, why are Asian exporters suffering?)

Shares of steelmaker POSCO fell nearly 2 percent despite a rise in steel prices for their Chinese competitors.

By's Nyshka Chandran. Follow her on Twitter @NyshkaCNBC