Asian stocks slid on Monday following Friday's sharp drop on Wall Streetas anti-government rioting in Egypt prompted investors to flee to less risky assets to ride out the turmoil.
Riots in the Middle East could trigger a sell off at a time when many expected a correction after a market rally of about 13 percent since November, analysts said.
Japan's stocks fell to its lowest closing level in a month, with analysts adding that the blow to sentiment comes at a time when the benchmark appeared due for a correction.
Disappointing earnings outlooks from Fujitsu and Konica Minolta also dragged the Nikkei lower, while the yen hovering at four weeks high versus the greenback provided additional pressure.
The benchmark Nikkei lost 1.2 percent, or 122.42 points, to 10,237.92. The benchmark index hit its lowest level since Dec. 3 at one point, but recouped some of its losses, as bargain hunters bought on dips and generally upbeat earnings by small-cap firms helped limit losses.
The broader Topix shed 1 percent to 910.08.
Seoul shares finished down, with shares of builders and autos including Daewoo Engineering & Construction and Hyundai Motor leading the losses.
Shares in techs also lost ground, with Samsung Electronics losing 2.9 percent after hitting a fresh all-time high in the previous session.
The Korea Composite Stock Price Index (KOSPI) finished down 1.8 percent.
Australian shares pared early losses to end down 0.4 percent, overcoming some weakness on political unrest in Egypt as a benign inflation gauge revived bank stocks and Wesfarmers outperformed after healthy second-quarter supermarket sales.
The top four banks all gained, led by National Australia Bank with a 0.9 percent rise to A$24.66.
The Reserve Bank is expected to leave rates on hold when it meets tomorrow and investors have priced out almost any chance of a hike until the second half of the year after severe
flooding is expected to lower economic growth.
The benchmark S&P/ASX 200 index fell 21 points.
BHP Billiton ended 1 percent lower while Rio Tinto shed 2.1 percent to a 3-week closing low.
Wesfarmers rose 0.8 percent to A$34.03 after it said same-store food and liquor sales at Coles advanced 6.6 percent in the quarter, beating market expectations and outpacing a 2.5 percent rise at larger rival Woolworths'. Woolworths shares fell 0.7 percent to A$26.70.
New Zealand building supplies firm Fletcher Building fell 2 percent after it weetened its bid
for Australia's Crane Group by about A$44 million, winning the support of the board. Crane stock rose 4 percent to A$9.96.
Sundance Resources rose 8.8 percent to A$0.495. Sundance noted a recent Reuters article saying POSCO, the world's No.3 steelmaker, has agreed with Cameroon to jointly develop iron ore in Mbalam.
Shares in Hong Kong fell as investors dumped risky assets, in particular emerging market
The benchmark Hang Seng index was down 1.1 percent by midday, extending losses since mid-January that have nearly wiped out the gains it saw at the beginning of the year.
Bucking the broader weaker trend, oil majors rose as crude oil prices climbed, China Petroleum & Chemical Corp (Sinopec) rose 3.1 percent and PetroChina gained 1 percent.
But CNOOC fell 2.3 percent extending Friday's 7 percent drop on the back of its conservative production forecast for 2011.
Financial issues were weaker, with heavyweight HSBC Holdings down 2 percent and the biggest drag on the broader market. Rival Standard Chartered fell 2.1 percent.
Chinese shares rose, underpinned by selective buying seen supported by government incentives.
Some analysts said uncertainty over monetary policies during the Lunar New Year holiday continued to hang over the market. People's Bank of China Governor Zhou Xiaochuan said in comments published on Monday that China may rise bank reserve requirements further to counter rapid capital inflows.
The Shanghai Composite Index has fallen 1 percent so far this month on a shortfall of cash in the domestic money market and investor caution over monetary policy.
Singapore shares were 1.27 percent down, in line with other Asian equity markets.
Shares of Singapore Airlines (SIA) fell 1.5 percent to S$14.82 after it reported on Friday a 29 percent fall in third-quarter net profit, hit by provisions for fines.
Shares of Thailand's Sri Trang Agro-Industry, the world's biggest rubber producer and exporter which was making its dual listing debut, were traded at S$1.21, 0.8 percent higher than its offer price of S$1.20.
Chinese shipbuilder JES International rose as much as 4.4 percent after it said its orderbook soared to $1.6 billion over the past few months.
The FTSE CNBC Asia 100 index fell 0.93 percent.