Singapore - Asian stocks dropped, after their best month since May 2009, as industrial companies led losses following data signaling a contraction in Chinese manufacturing.
The MSCI Asia Pacific Index fell 0.5 per cent to 133.77 as of 9:01 am in Tokyo. The measure rallied 8.6 per cent in October as China cut interest rates and the European Central Bank hinted at potential extra stimulus, while US and Japanese policy makers kept their monetary policies accommodative.
China's first key indicator this quarter, an official factory gauge, missed analysts' estimates, signaling that the manufacturing sector has yet to bottom out as global demand falters and deflationary pressures deepen.
"I'm struggling to see catalysts to encourage the market to take this rally to the next level," said Tony Farnham, a strategist at Patersons Securities in Sydney.
"China's PMI numbers were underwhelming. Manufacturing will probably remain weak as China tries to rebalance its economy away from manufacturing and into services."
The purchasing managers' index was unchanged at 49.8 in October, the National Bureau of Statistics said Sunday, compared with the median estimate of 50 in a Bloomberg survey. The non- manufacturing PMI, a barometer of services and construction, fell to 53.1 from 53.4 in September, the weakest since December 2008. Final numbers for the private Caixin China factory PMI are due Monday, with economists surveyed by Bloomberg projecting a reading of 47.6.
Japan's Topix index slid 1.4 percent after the yen gained 0.4 percent against the dollar on Friday. While the BOJ refrained from easing monetary policy last week, the Nikkei newspaper reported that the government may introduce additional budget measures if third-quarter gross domestic product, which will be announced on Nov. 16, shows the economy needs aid.
South Korea's Kospi index added 0.2 percent. Australia's S&P/ASX 200 Index lost 0.6 percent and New Zealand's NZX 50 Index was little changed. Markets in China and Hong Kong have yet to start trading.
Futures on the China A50 index fell 0.2 percent in most recent trading, while contracts on the Hang Seng China Enterprises Index lost 0.4 percent. The Shanghai Composite Index posted its biggest monthly advance since April as the Chinese government took measures to end a $5 trillion rout and policy makers introduced stimulus to boost economic growth.
E-mini futures on the Standard & Poor's 500 Index dropped 0.2 percent. The underlying gauge of U.S. equities slipped 0.5 percent on Friday as weaker-than-estimated quarterly results weighed on financial and consumer staples shares.
European Central Bank President Mario Draghi said that it's still an "open question" whether stimulus needs to be increased to bolster the economy.