Asian stocks were hit by a sell-off early Monday, with sentiment badly dented by Friday's brutal terrorist attacks in Paris.

The attacks, which occurred across seven locations, leaving 132 people dead and hundreds more injured, will likely have a "short, sharp effect" on equity markets, analysts say.

"The horrific events in Paris on Friday are likely to have a short, sharp effect in markets but in the long-term, real effects are more likely to influence political risk than the markets themselves," IG's market strategist Evan Lucas wrote in a note issued early Monday.

Meanwhile, US stock futures fell on Sunday, with the Dow futures down 150 points and the S&P futures declining 0.76 percent in early Asian trading. European equities are also not spared amid the latest tragedy; The London FTSE index is expected to open 1.8 percent lower, the German DAX down 2 percent and the French CAC losing 3.7 percent, according to spread better IG.

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Share markets in China tracked the region-wide downbeat sentiment, with the key Shanghai Composite index easing 1.3 percent from the get-go.

Among other indexes, the CSI300 Index and the smaller Shenzhen Composite slumped more than 1 percent each. Hong Kong's Hang Seng index plunged 1.8 percent to a near six-week trough.

Investors were digesting various events that took place over the weekend, such as the announcement from the China Securities Regulatory Commission (CSRC) after the market close on Friday that margin finance requirements will be raised to 100 percent from 50 percent, effective November 23.

Chinese stock indexes have regained their composure in November, following a dramatic meltdown in summer, helped by a steady rise in margin trading. "The move was a pre-emptive strike against 'irrational exuberance' of the kind that preceded the market crash. We expect more steps will be needed because of the attractiveness of the stock market where the government is pursuing pro-market reforms and the central bank is increasing accommodation," Tim Condon, head of research for Asia at ING Financial Markets, wrote in a note on Monday.

Meanwhile, the Chinese yuan, also known as the renminbi, moved closer to joining other top global currencies in the International Monetary Fund's (IMF) Special Drawing Rights (SDR) basket after staff at the fund gave the move a thumbs-up. IMF chief Christine Lagarde also said Friday that she supports the findings in her staff's proposal to include the Chinese currency in its benchmark foreign exchange basket.

However, the yuan slipped at Monday's open, as the People's Bank of China (PBOC) set the midpoint rate at 6.375 per dollar, weaker than the previous fix of 6.3655 and the previous day's close of 6.374.

Nikkei loses 1 percent

A double whammy took Japan's Nikkei 225 index down to its lowest level in about a week. Apart from the deadly attacks in Paris, traders also remained on the sidelines after preliminary figures for Japan's third-quarter gross domestic product (GDP) showed the world's third-largest economy slipping back into recession.

Japan's economy shrank an annualized 0.8 percent in the July-September period, government data showed early Monday, worse than the expected 0.2 percent contraction and following a 1.2 percent fall in the preceding quarter due to a drop in capital spending and weakening external demand across Asia.

By contrast, the Japanese yen was unchanged at 122.35 against the U.S. dollar following the data release.

Export-oriented plays were among the hardest-hit; Toyota Motor declined 1.8 percent, while Sony, Toshiba and Canon lost between 1.3 and 2.1 percent.

ASX drops 0.6 percent

Australia's S&P ASX 200 index clawed back some losses and recovered its footing above 5,000 points in early trade, as oil and gold-related counters rose on the back of firmer commodity prices.

Earlier on, the benchmark index had plunged as much as 1.1 percent to an intra-day low of 4,979 points, which marked the bourse's lowest level since September 30.

Gold producers such as Newcrest Mining and Evolution Mining widened gains to more than 5 percent each. Meanwhile, oil and gas producers Woodside Petroleum, Santos and Oil Search erased early losses, up between 0.8 and 1.3 percent.

Market bellwether BHP Billiton also rebounded 0.4 percent, brushing off a weaker open that was expected following a 1.3 percent slide in its U.S. ADRs.

However, lenders dwindled in the red, with National Australia Bank and Australia and New Zealand Banking among the worst performers, down more than 1 percent each.

Kospi skids 1 percent

South Korea's Kospi index hit a near two-month low at the open.

Lotte Shopping slumped nearly 5 percent to its lowest level since August 14 on the back of news that Hotel Lotte Co. has lost its license to run a duty-free retail outlet in Seoul to Doosan Corp. The loss of the license comes amid a power struggle between the retail conglomerate's chairman Shin Dong Bin and his elder brother. By contrast, Doosan shares surged 8.5 percent.

Heavyweight components mostly started the brand new trading week on the back foot; Samsung Electronics and Posco lost 1 percent each, but Hyundai Motor added 0.3 percent.

First Published:Nov 16, 2015 7:41 AM IST