Adding to the depressed mood, a Financial Times article cited state media reporting that Chinese Vice Premier Wang Qishan said the world will enter a long-term recession, while in addition markets were gripped by uncertainty over deficit-reduction negotiations in the U.S.
Underscoring investor worries about a darkening global growth outlook, the Singapore government on Monday said that the country's economic growth is likely to weaken in 2012 compared to this year amid "deteriorating external macroeconomic conditions."
"It's a brand new week but the same old concerns hover over financial markets. Debt debacles on both sides of the Atlantic continue to halt any potential uprising of brighter sentiment from traders," said Tim Waterer, senior foreign exchange dealer at CMC Markets in Sydney.
Japan's Nikkei Stock Average slid 0.3%, Australia's S&P/ASX 200 fell 0.7% to 4149.1, South Korea's Kospi Composite lost 1.5% and New Zealand's NZX-50 rose 0.2%.
Dow Jones Industrial Average futures were down 86 points in screen trade.
Cyclical shares led regional markets lower, with Sydney benchmark index touching a four-week low of 4140.1. Rio Tinto fell 1.1% and Newcrest Mining dropped 1.8%, while among financials National Australia Bank fell 1.0% and Australia & New Zealand Bank slipped 1.2%.
Exporters in Tokyo were lower after provisional trade statistics showed Japan slipped to a surprise trade deficit of ¥273.8 billion ($3.56 billion) in October against expectations for a ¥55.6 billion trade surplus. Fanuc fell 1.0%, Canon slipped 0.5%, Honda Motor lost 2.3% and Elpida Memory tumbled 5.2%.
In foreign exchange markets the euro was steady against the U.S. dollar as investors awaited developments in Europe following a report on Friday that the International Monetary Fund could tap the European Central Bank for funds to finance bailouts for European governments threatened with insolvency.
Investors were also focused on the U.S. Super Committee's deliberations on a deficit-reduction plan ahead of Wednesday's deadline.
The U.S. Super Committee's "failure is imminent, barring some last minute Black Swan. The market impact is likely to be minimal. Not only are developments in Europe more critical right now for the dollar's exchange rate, but expectations had been low and seeming to decline in recent days," said Brown Brothers Harriman in a note to clients.
The single currency was at $1.3525 against the dollar, from $1.3522 late on Friday in New York, and at ¥104.01 against the yen, from ¥103.90. The dollar was at ¥76.85, from ¥76.95.
Spot gold was at $1,718.70 per troy ounce, down $6.10 from its New York settlement on Friday. January Nymex crude oil futures were down 45 cents at $97.22 per barrel on Globex.
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