Asian markets edged lower Monday and pulled back from eight-month highs hit earlier this month, as investors fretted over whether the global economy had improved enough to justify a further rally.
Investors bought back into the U.S. dollar as a drop in oil prices from last week's eight-month highs prompted profit-taking in commodities-linked currencies such as the Australian dollar.
The dollar rose against a basket of six major currencies. The greenback also gained a lift as investors booked profits in currencies such as the Australian dollar , which fell 0.7 percent. The euro fell 0.4 percent, retreating after data last week showed that April euro zone industrial production fell by a record. U.S. crude futures dipped below $72 a barrel, edging down from an eight-month high hit last week.
Japan's Nikkei 225 Average fell 1 percent, dragged lower by chipmakers after disappointing guidance from a U.S. peer, as investors booked profits after the Nikkei rose to an eight-month high last week. But falls were checked by gains in property developers such as Sumitomo Realty & Development after Daiwa Institute of Research hiked its rating on the real estate sector to "neutral" from "underweight", citing ongoing improvement in credit markets and global confidence.
South Korea's KOSPI closed down 1 percent, led by banking issues such as Hana Financial Group, with renewed concerns about growing tensions with North Korea adding to pressure on shares.
Australian shares fell 0.8 percent, held down by resource companies amid lower commodity prices and as major capital raisings drained cash from the market.
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Hong Kong shares snapped a three-day winning streak, sliding 2.1 percent, amid a lack of fresh evidence of a global economic recovery and lower energy prices, while China stocks edged down as the market braced itself for an imminent resumption of IPOs. Shenzhen Development Bank rallied after Ping An Insurance said it would increase its stake in the mid-sized lender to close to 30 percent, from the under 5 percent it holds. But Ping An shares were mixed, as some analysts deemed the deal expensive and not greatly value accretive to the insurer's banking aspirations. Shares in Ping An and Shenzhen Development Bank had been suspended for a week to Monday.
Singapore's Straits Times Index dropped further, down 2.5 percent, taking cues from weak regional markets as oil prices dropped weighing on offshore & marine, commodity plays. Singapore's April retail sales fell a seasonally adjusted 3.1 percent from March due to lower sales of motor vehicles, government data showed on Monday.
China's Shanghai Composite Index moved back into the black, rising 1.7 percent, with losses in nonferrous metal and coal producers being offset by gains in banks.