Asian markets opened lower on Monday with the sterling tumbling about 0.5 percent to the dollar, while companies continue to report their earnings.

Sterling was last quoted down 0.40 percent against the dollar in early Asia trade, with the pound/dollar pair trading at USD 1.2415 at 8:18 a.m. HK/SIN, dropping from levels above USD 1.2500 in the previous session. Earlier, the pound fell a bit over 0.50%.

Experts pointed to a report from the Times newspaper that suggested Prime Minister Theresa May was preparing for the Scottish government to call a second independence referendum to coincide with the triggering of Article 50 in March.

"If that's the case, I suspect there's been a bit of an overreaction here," Ray Attrill, global co-head of foreign exchange strategy at the National Australia Bank, told CNBC.

Attrill added, "If the market does seriously think there can be another independence referendum much sooner than that, then remembering how hard the pound fell in early September 2014 just in front of the prior referendum, then the memory of that makes Sterling a fairly easy sell here."

Japan's Nikkei 225 was down 0.78 percent, with exporters likely under pressure from a relatively stronger yen, which traded at 112.06 to the dollar at 8:13 a.m. HK/SIN, strengthening from levels above 112.80 last week.

Major exporters were mostly lower, with Toyota down 0.87 percent, Honda down 1.32 percent and Sony off by 0.89 percent.

Shares of troubled Japanese airbag maker Takata beat the generally downward trend to climb 2.19 percent, after report that it is setting up a compensation fund for victims of faulty air bags. The Wall Street Journal reported that Takata's USD 125 million program will steer money to consumers harmed when the air bags ruptured and sprayed shrapnel.

Earlier this year, Takata agreed to plead guilty to wire fraud and pay a total of USD 1 billion in criminal penalties stemming from its fraudulent conduct in relation to sales of defective airbag inflators.

Elsewhere, SoftBank shares fell 1.20 percent, despite news the internet and telecom giant is close to finalizing an investment in WeWork. A source told CNBC the deal is expected to be worth over USD 3 billion.

In South Korea, the Kospi traded down 0.11 percent. Australia's benchmark ASX 200 traded down 0.21 percent.

Meanwhile, the dollar index traded at 101.20 at 7:42 a.m. HK/SIN, climbing from levels below 100.8 in the previous session.

Among other currency majors, the yen traded at 112.22 to the dollar, strengthening from levels above 112.80 last week, while the Australian dollar fetched USD 0.7665.

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First Published:Feb 27, 2017 7:35 AM IST