Asian stock markets tumbled and the euro lost ground early Monday in the first trades after the deadly weekend terror attacks in Paris.

The late-night assault on Friday in French capital, which killed 129 people, sparked concerns about security in Europe and its impact on the already struggling eurozone economy.

It also sowed fresh uncertainty in already nervous markets, which ended last week on a low owing to increasing worries about the state of the global economy.

Losses across Asian stock markets were joined by a fall in the euro, which is already under pressure from expectations the European Central Bank will loosen monetary policy to shore up the eurozone.

"There is no doubt that the attacks in Paris will contribute to short-term investor nervousness," Shane Oliver, Sydney-based strategist at AMP Capital Investors, said.

However, he added that he expected the Paris-linked losses to be brief and pointed out that markets had bounced back from initial selling following past terror attacks.

"I think history will repeat itself. It will just be a short selloff in response to the Paris attacks," he told Bloomberg News.

In early trade Hong Kong was 1.2 percent off, Tokyo fell one percent and Sydney gave up 0.9 percent.

Adding to selling pressure in Tokyo Monday was data showing the Japanese economy had slipped into recession for the second time in three years, throwing into question the government's much-vaunted drive to kickstart growth and inflation.

The Cabinet Office said gross domestic product (GDP) shrank 0.2 percent in July-September, or 0.8 percent on an annualised basis, marking the second straight quarterly decline -- a technical recession.

The preliminary figure was worse than the 0.1 percent decline forecast in a Bloomberg News survey and will put pressure on the Bank of Japan to ramp up its bond-buying scheme of monetary easing. The central bank is scheduled to hold a policy meeting this week.

The soft results continue to flow despite Prime Minister Shinzo Abe's big-spending three-year plan -- dubbed "Abenomics" -- to revitalise the torpid economy and end years of debilitating deflation.

Taro Saito, director of economic research at NLI Research Institute, told AFP: "Companies are reluctant to invest despite their sound profits." He added that while consumer spending improved "its overall trend still remains weak".

In China, authorities doubled the deposit required for investors to borrow funds to trade stocks -- known as margin trading -- as they try to limit a practice that led a massive market bubble and summer rout.

The minimum requirement for margin trading was hiked to 100 percent from 50 percent, meaning traders must have the same level of funds in their accounts as the amount they want to borrow.

Margin trading was behind a stock market rally that sent the Shanghai index up 150 percent in a year, before it crashed in June.

The move comes as Shanghai rebounds from the summer volatility, with the benchmark index now up 22 percent from its August low. However, on Monday it was off 0.6 percent.

 

Tokyo - Nikkei: DOWN 1.0 percent at 19,407.97.

Hong Kong: DOWN 1.2 percent at 22,120.80.

Shanghai - composite: DOWN 0.4 percent at 3,565.77.

Euro/dollar: DOWN to $1.0721 from $1.0764 late Friday

Euro/yen DOWN to 131.31 yen from 131.99 yen

Dollar/yen: DOWN to 122.56 yen from 122.62 yen

New York - Dow: DOWN 1.2 percent at 17,245.24 (close)

New York - S&P 500: DOWN 1.1 percent at 2,023.04 (close)

New York - Nasdaq: DOWN 1.5 percent at 4,927.88 (close)