Markets in Asia dipped on Monday to snap a six-day winning streak, with investors caught between aggressive steps by central bank to alleviate the sharp global downturn and increasingly grim economic data.
Higher-yielding currencies such as the Australian dollar fell ahead of rate cuts expected this week, while oil prices shed more than a $US1 after cartel OPEC delayed a third supply cut to later in December.
The New Zealand market was down 1% at the close of trade.
Major central banks from Australia to Europe are seen slashing interest rates deeper this week in a string of policy meetings, marking the latest chapter in official efforts to limit the economic fallout from the 15-month credit crisis.
Stocks around the world had recovered last week after the US government rescued banking giant Citigroup, the Federal Reserve said it would buy up to $US800 billion debt to help households access credit and China slashed rates.
But portfolio managers are grappling with whether the sell-off across equity markets has adequately anticipated the drop in corporate profits from the sharp economic downturn, or whether a further slide is in the offing.
The MSCI index of Asia-Pacific stocks outside Japan inched down 0.3% but is up 18% from a five-year low in November. For the year, the index has plunged 57%.
Japan's Nikkei stock index ended down 1.35% on Monday, hit by a stronger yen and profit-taking ahead of US economic data and interest rate decisions in Europe due later in the week. The Nikkei dropped 115.05 points to 8,397.22.
In Australia, the benchmark index closed weaker on subdued trading despite a rally on Wall Street and expectations the Reserve Bank of Australia will cut interest rates.
The S&P/ASX200 index finished 61.3 points or 1.64% lower at 3681.2, while the broader All Ordinaries lost 53.7 points or 1.46%, at 3619.
The New Zealand market also started the week lower, down 28 points, or 1%, to 2682 on turnover of $38 million.
Top stocks all fell. Telecom was down 16 cents to $2.33, Contact Energy fell 5c to $6.70, while Fletcher Building was down 3c to $5.55.