Japanese markets were closed for a national holiday, keeping volumes of Asian stocks subdued.
Uncertainties about the debt deal in the U.S. and risks of contagion of the fiscal crisis in the euro zone put pressure on the markets. As a result Asian markets closed in a red zone on Monday.
Hong Kong extended last week’s fall, as property stocks declined on worries that China’s authorities may take further steps to curb house price increases.
Amid the U.S. debt issue, stocks of some export-focused firms fell with Samsung Electronics Co. (SSNHY) down 2.3% and Hyundai Motor Co, (HYMTF) losing 1.5%. In 2010 Korea’s exports comprised 51.6% of gross domestic product - the economy is vulnerable to sudden changes in global economic conditions
Seoul was the region’s underperformer as chipmakers suffered substantial losses amid falling semiconductor prices: the Kospi index fell 0.7 per cent to 2,130.48.
In the tech sector, Samsung Electronics fell 2.3 per cent and Hynix Semiconductor shed 4.4 per cent. Posco, the steelmaker, lost 3.3 per cent.
Hong Kong's Hang Seng Index lost 0.32 percent to 21,804.75;
China’s Shanghai Composite Index slipped 0.12 percent to 2,816.69;
Australia’s S&P/ASX 200 index ended little changed (-0.03) at 4,472.0.
Shares of banks tumbled across Europe.
In UK the FTSE 100 index lost 1.32 percent to 5,752.81 with Royal Bank of Scotland Group PLC fell 7.1%, Barclays PLC retreated 3.84%, and Lloyds Banking Group PLC weakened 7.47%.
The German DAX 30 index dropped by 1.55 percent to 7,107.92 with Deutsche Bank AG -4.09%, Commerzbank AG -5.95%.
The France’s CAC 40 index fell by 2.04 percent to 3,650.71: Societe Generale -5.48%, Paribas SA -3.64%, AXA SA -5.40%.
Today Italy 10-year yield rose to 6.02% - highest since November 1997. Spanish bond yields also surged euro-lifetime highs.Also analysts determined last week’s stress test of banks in Europe was fairly relaxed, stoking continued concerns about European debt.
ECB President Jean-Claude Trichet noted again his opposition to any restructuring of Greek debt.
Stocks sold off sharply Monday and gold prices rose, as worries about Europe's debt crisis and uncertainty over the U.S. debt ceiling kept investors on edge.
U.S. stocks took their cues from Europe after results from the latest bank stress tests fanned concerns about the challenges facing the European Union as it struggles to resolve the debt crisis in Greece.
Those worries weighed on shares of U.S. financial institutions, with Bank of America (BAC, Fortune 500), Goldman Sachs (GS, Fortune 500) and Morgan Stanley (MS, Fortune 500) all trading at their lowest levels in over two years.
American Express (AXP, Fortune 500), Citigroup (C, Fortune 500), JPMorgan (JPM, Fortune 500) and Travelers (TRV, Fortune 500) were also under pressure.
But the declines were broad, with all 30 Dow components in the red. Industrial names Alcoa (AA, Fortune 500), Caterpillar (CAT, Fortune 500) and Boeing (BA, Fortune 500) were among the hardest hit.
Companies: In total, more than a fifth of the S&P 500 and half of the 30-member Dow Jones industrial average will report their results this week.
After the closing bell, IBM (IBM, Fortune 500) reported second-quarter earnings that beat analysts' expectations. The company said earnings rose 18% to $3.09 a share, versus a forecasted $3.03 a share profit.
Cisco (CSCO, Fortune 500) announced plans to cut its global workforce by 6,500 employees, including some early retirements. The move is part of a plan to save the company $1 billion a year.
Bank 
