Japan's benchmark Nikkei 225 shed 0.4% to 27,159.27 as the government was preparing to declare a state of emergency in Tokyo and several surrounding areas.
"With the seven-day average new cases still hanging in the 600 K zone globally, few are likely expecting the market to be spared the resurgence of COVID-19 fears," said Jingyi Pan, senior market strategist at IG in Singapore. The selling comes as coronavirus cases keep climbing at frightening rates around the world, threatening to bring more lockdown orders that would punish the economy. The worsening numbers also raise the possibility that Wall Street has been overly optimistic about the big economic recovery it sees coming because of COVID-19 vaccines. Tuesday's upcoming runoff elections to determine which party controls the Senate may also be contributing to the volatility.
Small company stocks, which have been notching solid gains in recent weeks, also fell. The Russell 2000 index of smaller companies dropped 1.5%, to 1,945.91.