Asian markets ended the Monday session mixed with Tokyo and Seoul shrugging off a downgrade of Spain's credit rating while China shares booked sharp losses, hit by concerns over further tightening measures.
For the month of May, Asian stocks looked set to post their worst month since October 2008 as Europe's sovereign debt woes prompted investors to dump riskier assets such as equities and commodities.
China's key stock index fell 2.4 percent after the State Council said on its website on Monday that it would gradually start to reform property tax policies. The announcement came after a report that Shanghai's government had submitted a property tax plan to the central government.
China's benchmark Shanghai Composite Index ended the day at 2,592.1 points, after closing flat on Friday.
Hong Kong property counters were also under pressure on persistent concern about moves by both governments to clamp down on speculation in their booming real estate markets.
The benchmark Hang Seng Index was down 0.4 percent on news that the Hong Kong government had decided not to award the tender for a HK$33 billion ($4.24 billion) housing project, suggesting that the city's real estate market was continuing to stagnate under government measures to curb speculation.
Nikkei, KOSPI Shrug Off Spain's Pain
Nikkei average inched up for a fourth straight day of gains on Friday amid a lull in worries about Europe's debt crisis, with market players saying Fitch Ratings downgrade of Spain had already been priced in.
But concerns about sovereign debt woes in the euro zone pushed the benchmark to slide nearly 12 percent in May, its worst monthly fall in 1-½ years.
A number of exporters including Canon eked out gains as the yen fell back against the dollar and the euro, with market players saying investors were bargain-hunting on any dips in share prices. Canon rose 0.1 percent to 3,745 yen and Nissan Motor edged up 0.3 percent to 664 yen.
Shares of Promise dropped 6.3 percent to 591 yen, their lowest intraday level since Dec. 21, extending losses after Moody's Investors Service cut the consumer lender's credit ratings by two notches, highlighting the severe business environment for the industry.
Electronics conglomerate Hitachi rose 0.5 percent to 372 yen after it said it plans to focus spending on infrastructure-related businesses such as power plants as it seeks to more than double its profit over the next three years.
Seoul shares rose on Monday, shrugging off Fitch's downgrade of Spain's credit rating, with firm gains by auto and telecommunications issues including Ssangyong Motor and SK Telecom boosting the market.
The Korea Composite Stock Price Index (KOSPI) finished up 1.14 percent at 1,641.25 points.
Telecommunications issues outperformed, with SK Telecom, South Korea's top wireless carrier, gaining 2.51 percent.
Carmakers also lifted the market, led by Ssangyong Motor, which jumped 14.62 percent after news late on Friday that France's Renault and India's top utility vehicle maker Mahindra were in the running to buy the troubled SUV maker. Hyundai Motor ended up 1.82 percent.
Memory chip issues declined after the key U.S. semiconductor index lost 1.63 percent. Hynix Semiconductor fell 2.14 percent, hit further after the world's No.2 memory chip maker said early on Monday that it would acquire shares of its Chinese unit from partner Numonyx for 522 billion won ($437 million).
Australia Logs Worst Monthly fall in 1-½ Years
Australian stocks fell 0.6 percent on Monday and capped their worst monthly performance in more than a year and a half, as investors grew distressed about Europe's debt pile and Australia's proposed resources tax.
The index fell 7.9 percent in May, its worst monthly performance since October 2008, but traders said the selloff was overdone and Australian stocks would be definite 'buys', if not for the uncertainty over the resources tax.
The benchmark S&P/ASX 200 indexdropped 27.79 points to 4,429.70, according to latest available data. The index climbed 1.8 percent on Friday to end its best week since September.
Banks were largely lower with third-biggest lender Westpac Banking Corp falling 1.9 percent on concerns over the European crisis.
Hospital operator Healthscope bucked the trend to rise 5 percent to A$5.5 after it said two more bidders had approached the firm with each bidding A$5.8 a share.
Takeover target Sigma Pharmaceuticals rose 7 percent. It said it would allow bidder Aspen Pharmacare to inspect its books.
Top brewer Fosters Group rose 1.5 percent to A$5.58. It plans to separate its robust beer and struggling wine business leading to takeover speculation. The Sydney Morning Herald said SABMiller is rumored to be considering a A$12 billion bid for the beer division.
Singapore, Malaysia Edge Higher
Southeast Asian markets moved higher with the Straits Times Index up 0.5 percent, or 23.88 points at 2,752.60, while the KL Composite rose 1.2 percent.
Healthcare firm Parkway Holdings shares resumed trading Monday to gain a whopping 22.9 percent on reports India's Fortis Healthcare is considering launching a counter-offer for the Singapore-based firm.
Parkway shares were suspended when Malaysian wealth fund Khazanah launched an $835 million bid for the firm.