Asian stock markets slumped Monday as renewed concerns over the euro zone debt crisis and worries about the Chinese economic slowdown dented investor sentiment.

The Japanese benchmark Nikkei plunged 1.86 percent or 161.55 points to 8,508.32, Hong Kong's Hang Seng tumbled 2.99 percent or 587.33 points to 19053.47 and Chinese Shanghai Composite declined 1.26 percent or 27.24 points to touch 2,141.40 while Indian benchmark BSE Sensex fell 1.24 percent and South Korea's KOPI Composite plunged 1.84 percent.

The euro zone debt crisis once again took the center stage after Spain's cost of borrowing hit fresh euro-era high. Spanish stocks slumped Friday after the eastern region of Valencia said it would apply for financial assistance from the Central Government. Adding to concerns, the official growth forecast for 2013 was revised down to negative 0.5 percent from 0.2 percent previously.

Spanish benchmark 10-year bond yields soared to 7.32 percent, exceeding the 7 percent rate at which Greece, Ireland and Portugal were forced to seek financial aids, as doubt spread among bond investors that the short-term support measures available to policymakers currently lacked the firepower needed to address the crisis and that a full sovereign bailout was inevitable sometime in the future.

Meanwhile, Greece is back in the spot light once again following the decision by the ECB Friday to not accept the Greek debt as collateral as collateral no longer pending the results of the Troika's review. The troika consisting of the European Commission, the European Central Bank and the IMF will meet in Athens Monday to discuss whether the debt ridden country will receive fresh tranche of 31.5 billion euros by September under its debt rescue program.

The ECB decision not to accept Greek debt as collateral and the visit of the Troika (EC, ECB. IMF) will keep markets nervous as default fears intensify, said a note from Credit Agricole.

Concerns over the Chinese economic slowdown also added to the down side. Song Guoqing, a member of the People's Bank of China monetary policy committee, predicted the nation's expansion might cool to 7.4 percent this quarter, adding to concern that the world's second biggest economy has yet to bottom out, Bloomberg has reported.

Exporter and steel makers led the declines in Japan. Exporters plunged as the yen rose to an 11- year high against the euro on Greece exit worries. Sony Corp plunged 4.07 percent and Canon Inc. slumped 4.59 percent while Toyota Motor Corp. fell 1.75 percent.

JFE Holdings Inc. declined 3.12 percent and Nippon Steel Corp. fell 1.95 percent on news that both companies would probably report heavy drop in quarterly profits.

Financials plunged across the region. Sumitomo Mitsui Financial Group Inc declined 2.91 percent in Tokyo and KB Financial Group Inc. plunged 3.61 percent in Seoul while HSBC Holdings Plc. slumped 5.68 percent and China Life Insurance Co plunged 4.76 percent in Hong Kong.