Asian stock markets declined Monday despite a report showing stable Chinese manufacturing activity in April.
The Japanese benchmark Nikkei declined 0.20 percent or 19.19 points to 9,542.17, Chinese Shanghai fell 0.76 percent and Hong Kong’s Hang Seng plunged 1.84 percent, while Indian benchmark BSE Sensex slipped 0.79 percent.
The preliminary HSBC China manufacturing purchasing managers index (PMI), which is a measure of the nation-wide manufacturing activity, improved to a two-month high of 49.1 in April compared to 48.3 in March, alleviating fears about soft global demand and reduced real estate investment in the world's second-biggest economy.
However, the reading is still below the 50-point threshold indicating that factory activity may contract for the sixth month in China.
Meanwhile, the first round of French elections also weighed on the sentiment. Preliminary results confirmed that Hollande, who intends to renegotiate the EU’s new fiscal pact, with 28.8 percent of the votes and Sarkozy with 26.1 percent of the votes will advance to the second round.
Sarkozy's leadership abilities were instrumental in the euro zone's fight against debt and investors are obviously worried that an absence of this key figure may be detrimental to further progress, Oh On-su, an analyst at Hyundai Securities told Reuters.
In Japan, Yakult Honsha climbed 11.70 percent on the news that France's Danone may increase its stake in the company to 28 percent from 20 percent.
Rakuten Inc. plunged 3.92 percent after announcing it will discontinue its online shopping mall in China due to tough competition and underperforming sales.
Daewoo Shipbuilding & Marine Engineering declined 3.04 percent and Samsung Heavy Industries fell 2.5 percent in Seoul after Daewoo Engineering reported a 38 percent decline in its first-quarter operating profit.