Asia stocks lower on China liquidity fears; Nikkei ends down 1.3%

Investing.com - Asian stock markets were sharply lower on Monday, with shares in mainland China and Hong Kong coming under heavy selling pressure amid mounting concerns over tight liquidity conditions.

Other regional indices were lower amid indications the Federal Reserve could start scaling back its bond buying program by the end of the year.

During late Asian trade, Hong Kong's Hang Seng Index was down 2.4%, Australia’s ASX/200 Index ended 1.5% lower, while Japan’s Nikkei 225 Index ended down 1.3%.

In Hong Kong, the Hang Seng tumbled to a nine-month low as fears over tight liquidity conditions continued to pressure financial sector stocks.

China Construction Bank shares dropped 1.8%, Industrial and Commercial Bank of China fell 2.6%, while China Minsheng Bank plunged 8.2%.

Meanwhile, in Australia, the benchmark ASX/200 Index ended lower as global miners came under pressure amid concerns over China’s economic outlook.

Rio Tinto and BHP Billiton declined 2.2% and 3.4% respectively, while Fortescue Metals Group saw shares tumble 4.3%.

Australian commodity producers are heavily reliant on Chinese demand for raw materials.

Elsewhere, in Tokyo, the Nikkei turned lower in afternoon trade, despite a weaker yen, after the Federal Reserve said last week that it could start rolling back its bond buying program this year.

Japanese megabanks were lower, with shares in the nation’s largest lender Mitsubishi UFJ Financial Group falling 1%, while Nomura Holdings slumped 1.1%.

Looking ahead, European stock market futures pointed to a lower open.

The EURO STOXX 50 futures pointed to a loss of 1% at the open, France’s CAC 40 futures declined 0.7%, London’s FTSE 100 futures indicated a loss of 0.7%, while Germany's DAX futures pointed to a drop of 0.8% at the open.

The Ifo institute was to release a report on German business climate later in the trading day.