China's stock markets were hit by another wave of volatility Monday after suffering their heaviest losses since the summer rout, while most other Asian markets started an eventful week on the defensive.
Chinese dealers were buoyed by hopes the International Monetary Fund will agree to a proposal from its executive board to include the Chinese yuan in its special drawing right (SDR) basket of elite currencies.
But they remain on edge after Friday's collapse, which was fuelled by news that China's biggest brokerages were being probed over suspected "rule violations" in the wake of the multi-trillion-dollar stock market plunges.
Agreement over the yuan's inclusion, which is widely expected, would realise a long-held goal for Beijing of giving its unit international status, alongside the dollar, euro, pound and yen.
Inclusion would lead to mainland stocks becoming more accessible to foreigners, Hao Hong, Hong Kong-based equity strategist at Bocom International Holdings, wrote in a note on Monday. The yuan reversed morning losses to sit slightly higher against the dollar in late trade.
Shanghai dived 5.5 percent and Shenzhen more than six percent Friday after brokerage giant Citi and Guosen said they were being investigated by officials, while Haitong halted trading in its shares.
The losses were exacerbated by worse-than-expected profits for Chinese industrial giants and worries over the start of initial public offerings (IPOs) this week.
The drop rekindled painful memories of the sharp sell-off between June and August that saw Shanghai slump 40 percent and trillions wiped off valuations. Shares have since recovered about 25 percent.
Brokerage equities plunged in Shanghai Monday again. Haitong slumped almost nine percent as trading resumed while Citic lost 1.5 percent, extending Friday's losses.
"The brokerage sector is likely to continue to experience some pressure," Gerry Alfonso, a sales trader at Shenwan Hongyuan Group in Shanghai, told Bloomberg News.
"Given the volatile environment, investors are likely to stay away from sectors that might be impacted by the manufacturing figure."
- China concerns -
However, Shanghai and Shenzhen's benchmark index ended the day slightly higher, having swung between positive and negative all day, while Hong Kong was 0.3 percent lower.
But Tokyo fell along with Sydney, while Seoul sank 1.8 percent.
"Concerns over slowing growth in China and some parts of global economy still persist and may last through the first half of 2016," said Agus Yanuar, President Director at PT Samuel Aset Manajemen in Jakarta.
Investors are keeping tabs on the release of a string of figures and meetings this week that could have market-moving effects across the globe.
Among the key events are the release of manufacturing data from major economies, a European Central Bank policy meeting that could see further monetary easing and a US jobs report at the end of the week.
Federal Reserve chair Janet Yellen is also due to appear before Congress, with markets hoping for more guidance ahead of the central bank's expected interest rate cut next month. The OPEC oil cartel is also due to start a crucial meeting to discuss output at the end of the week.
"After last week's doldrums, this week's agenda will come as a shock to the system," Raiko Shareef, a markets strategist in Wellington at Bank of New Zealand said in a client note.
"Front of mind will be the ECB's policy decision. The US employment reports will garner interest, but only a disastrous result would likely derail the (Fed policy board) from raising rates next month."
Talk of further ECB stimulus has put fresh pressure on the euro, which is sitting at lows not seen since April.
Markets were given little inspiration from New York, with Wall Street trading for just half a day Friday as the country celebrated the Thanksgiving break.
In Europe on Monday, London dropped 0.4 percent, Frankfurt eased 0.2 percent and Paris shed 0.3 percent.
- Key figures around 0830 GMT -
Tokyo - Nikkei 225: DOWN 0.7 percent at 19,747.47 (close)
Shanghai - composite: UP 0.3 percent at 3,445.40 (close)
Hong Kong: DOWN 0.3 percent at 21,996.42 (close)
Sydney - S&P/ASX 200: DOWN 0.7 percent at 5,166.50
Euro/dollar: DOWN to $1.0586 from $1.0595 in New York
Dollar/yen: UP to 122.84 yen from 122.85 yen
New York - Dow Jones: DOWN 0.1 percent at 17,798.49 (close)