Asian stocks fall as US, China data spark growth fears

Asian stocks started the week on the back foot, as data showing China's manufacturing sector in a poor state, along with a less-than-stellar growth data from the U.S., fueled worries over the global economy.China's final HSBC Purchasing Managers' Index (PMI) fell to 49.7 , a touch below its 49.8 flash reading, and after dipping to 49.6 in December. A reading below 50 indicates contraction. The data comes a day after the government's official PMI for January also dipped into contractionary territory for the first time in two and the half years, coming in at 49.8 and surprising market watchers who were expecting expansion. U.S. stocks declined on Friday, with benchmarks down for a second month, after data showed U.S. economic growth slowed sharply to a less-than-expected 2.6 percent in the fourth quarter. The Dow Jones Industrial Average fell 1.5 percent, while the S&P 500 declined 1.3 percent. The tech-heavy Nasdaq Composite shed 1 percent.

Mainland indices down China's benchmark Shanghai Composite index tanked 2.5 percent to a near two-week low, dragged lower by the PMI data. An approval of 24 new initial public offerings (IPOs) last Friday also contributed to the gloom in markets. Insurance firms were among the top losers for the day, with China Life Insurance slumping 6.7 percent, while China Pacific Insurance and Ping An Insurance (Shanghai Stock Exchange: 1318-SZ) sagged 4.4 percent each. Financials also languished, with China Minsheng Banking (Shanghai Stock Exchange: 16-SZ) paring losses to 3 percent in Shanghai and 3.4 percent in Hong Kong, following news that its president resigned hours after Chinese media reported he was being investigated by China's anti-corruption watchdog. Bank of China (Shanghai Stock Exchange: 1988-SZ) and Bank of Communications (Shanghai Stock Exchange: 1328-SZ) also sold off nearly 6 and 4.3 percent, respectively. China Railway Construction Corp (Shanghai Stock Exchange: 1186-SZ) (CRCC) made losses of nearly 10 percent after Mexican authorities decided to shelve a $3.75 billion high-speed rail project, which was poised to be clinched by the CRCC. In Hong Kong, the Hang Seng index slipped 0.4 percent.

Read More East Asia - a bright spot in global economy Nikkei falls 0.7% Japan's key Nikkei 225 index settled at a one-week low as dollar-yen retreated below the 118 handle to its lowest levels in two weeks, and as soft economic data from the U.S. and China cast shadows on global growth. Last Friday's rebound in oil prices was a big hit to Japanese airlines and power companies. ANA Holdings and Japan Airlines (Tokyo Stock Exchange: 9201.T-JP) tanked 1.7 and 2.1 percent each, with the latter also hurt by news of a 3.1 percent slip in its net profit for the April-December period. Similarly, Kansai Electric Power (Tokyo Stock Exchange: 9503.T-JP) skidded 6.9 percent, while Chubu Electric Power (Tokyo Stock Exchange: 9502.T-JP) and Tokyo Electric Power (Tokyo Stock Exchange: 9501.T-JP) eased 4 percent, respectively. While most exporter stocks languished as a result of a stronger currency, Honda bucked the downtrend to charge 3.3 percent, despite cutting its profit outlook for the second consecutive quarter last Friday. Toyota Motor (Tokyo Stock Exchange: 7203.T-JP) and Nintendo (Tokyo Stock Exchange: 7974.T-JP) also outperformed their respective peers, by finishing 0.2 percent higher. Read More Asia on central banks, China watch this week ASX adds 0.7% Australia's benchmark S&P ASX 200 index finished at a more than four-month high, chalking up an eight-session winning streak, while the Australian dollar (Exchange:AUD=) inched up to $0.7784 to the dollar, ahead of the central bank's monthly policy meeting tomorrow. "It seems a lot of traders are banking on a 'sell the rumor, buy the fact' approach, with the market pricing in a 69 percent chance of a cut," said Stan Shamu, IG market strategist. "The ASX 200 is headed towards the September 2014 highs of 5,650 and we could see some consolidation in that region." Despite crude oil markets reversing last week's rally in early Asian trade, the energy sector remained buoyant. Origin Energy (ASX:ORG-AU) climbed 3.5 percent, while Santos, Oil Search and Woodside Petroleum (ASX:WPL-AU) made gains between 1.1 and 2.7 percent. Smaller gold players Evolution Mining (ASX:EVN-AU) and Endeavor Mining also surged 11.1 and 5.1 percent, respectively, as the gold price gained ground. JB Hi-Fi (ASX:JBH-AU) bolstered nearly 2 percent, after briefly falling into negative territory on news of a 2 percent fall in first-half profit. Westpac (ASX:WBC-AU) is also in focus as Brian Hartzer starts as the bank's new Group CEO today. Shares of the lender closed up 1.1 percent.

Kospi slips 0.2% South Korean shares erased gains to drift below the flatline as trading sentiment turned sour following downbeat economic data from the mainland, which is Korea's largest trading partner. On the domestic data front, South Korean's current account surplus fell to a seasonally adjusted $7.66 billion in December, from a revised $9.64 billion in the preceding month. Oil-related counters were mostly higher, with SK Innovation (Korea Stock Exchange: 9677-KR) bouncing up 4.1 percent, while petrochemical stock LG Chem (Korea Stock Exchange: 5191-KR) rallied 3.5 percent. Posco recovered modestly after skidding nearly 8 percent last Friday following a dismal fourth-quarter operating profit. Shares of the steelmaker elevated 0.8 percent. However, LG electronics - the world's number 2 TV maker - remained bogged down by weaker-than-expected profit for the October-December period, sagging half a percent.