Asian markets were rattled by turmoil in Egypt which drove up crude prices and raised concerns that Suez Canal, the key shipping route for goods between Red Sea and Mediterranean may get disrupted.
Japan's Nikkei fell 1.2% to a one-month closing low on Monday as investors shunned riskier assets. The unrest in Egypt put safe-haven assets back in favour, with the yen gaining in early Asian trade to hover near four-week highs versus the greenback, providing additional downward pressure to shares of exporters.
But oil-related stocks like Japan's top oil explorer Index gained as Brent crude surged to a 28-month peak near $100 a barrel on worries that oil shipments through the Suez Canal would get disrupted.
The Nikkei has gained some 12 percent since early November as foreigners piled into lagging Tokyo equities, but market players say the bull-run could be drawing to a close, despite expectations of strong October-December results overall from Japanese corporations.
Over the past three sessions foreigners, who account for over 60 percent of trade on the Tokyo stock market, have placed net sell orders before the market opened.
The Hang Seng Index finished down 0.72% at 23,447. The index is up 1.8 percent on the month despite a 4% decline since January 19 on the back of worries that investors may have been too optimistic at the start of the year.
Straits Times, Singapore's benchmark index dropped 1.5% and Seoul Composite slipped 1.8%. Taiwan Weighted bucked trend, was up 0.6%.
European markets were also struggling in early trades as traders fretted over the potential impact of rising oil prices.
The French CAC 40 index slipped 1% and the German DAX 30 index fell 0.8% and FTSE 100 was off 0.8%. Furthermore moody’s downgrade on Egypt’s bond rating weighed on the European markets.