Tuesday's trading in the Chinese market may be affected by the July HSBC flash PMI data, the earliest monthly indicator of China's industrial activity, due out at 10:30 Beijing time, and growing worries about the euro zone.

The Shanghai Composite Index started the week with a 1.26 percent fall to close at a 40-month low of 2141.40, but off its intra-session lows.

The CSI300 Index of the top Shanghai and Shenzhen listings ended down 1.3 percent at its lowest since Jan. 16.

"Markets are playing catch up after we overshot on Friday. Some investors are also taking some profits on some of last week's top performers," said Jackson Wong, vice-president of equity sales at Tanrich Securities.

Market Factors:

Renewed concerns over the euro zone may also weigh on Asian markets. Stocks in Europe and the U.S. took a battering on Monday as fears over Europe's debt crisis returned to haunt markets. Spain is the epicenter of the current bout of fears, with investors increasingly concerned that the country will not be able to turn its public finances around without outside help.

A forecast from a Chinese central bank adviser that China's economy could wane further in the third quarter also deepened concerns about the global slowdown. China's economic growth slowed to a three-year low of 7.6 percent in the second quarter.

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