(MENAFN- AFP) Asian markets dropped at the start of the new trading week, picking up where they left off after last week's Fed-inspired rally ran out of steam.
After a burst of enthusiasm on the back of the US central bank's decision to keep interest rates on hold for a little longer, the downward trajectory for the region continued on Monday.
The stay of execution for easy money served also to bolster the Japanese yen, knocking the stuffing out of Tokyo which ended down 1.25 percent and adding to the gloom.
A stronger yen tends to make Japanese stocks less desirable.
Uneasiness over oil was also dampening enthusiasm, ahead of a meeting of the Organization of Petroleum Exporting Countries (OPEC) and Russia this week.
"Oil spot prices will have a big influence on where equities markets are going to trade for the early part of the week," said Angus Nicholson, a Melbourne-based analyst at IG Ltd.
"There are uncertainties over whether the OPEC members can reach an agreement," he told Bloomberg News.
Two years of oversupply and OPEC's failure to reach any kind of consensus on how to deal with it have left observers sceptical of any change in direction when players meet in Algeria.
Hong Kong and Shanghai were both down 0.9 percent in mid-afternoon.
Sydney closed flat, while Taiwan gave up one percent and Seoul slipped 0.3 percent.
Monday's loss of altitude came on the back of a disappointing Friday in the US, where the Dow slid 0.7 percent and the tech-rich NASDAQ gave up 0.6 percent. Shares in Apple and Yahoo led the charge downwards.
Frankfurt and Paris each lost around half a percent in value, while London held steady.
The yen was higher Monday, with currency traders apparently emboldened by last week's Bank of Japan move to target 10-year government bonds in its latest bid to fuel inflation.
The dollar was buying 100.86 yen in mid-afternoon Asian trade against 101.02 yen in New York on Friday.
"The Bank of Japan has lost control of the yen," said Matthew Sherwood, head of investment strategy in Sydney at Perpetual Ltd.
"The only hope for Japan and the yen may be an aggressive Fed, but this is looking next to impossible despite an apparent split in the Fed Open Market Committee.''
Oil traders were a little more optimistic before the OPEC meeting.
US benchmark West Texas Intermediate for November delivery was up 36 cents at $44.84 while Brent crude gained 41 cents to $46.30.
- Key figures around 0630 GMT -
Tokyo - Nikkei 225: DOWN 1.3 percent at 16,544.56 (close)
Hong Kong - Hang Seng: DOWN 0.9 percent at 23,472.88
Shanghai - Composite: DOWN 0.9 percent at 3,006.76
Euro/dollar: UP at $1.1228 from $1.1128 late Friday
Dollar/yen: DOWN at 100.86 yen from 101.02 yen
Pound/dollar: UP at $1.2959 from $1.2972
New York - DOW: DOWN 0.7 percent at 18,261.45 (close)
London - FTSE 100: FLAT at 6,909.43 (close)
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