(CNN) -- Asian markets moved lower on Monday unable to resist the downward trend of European markets that reacted negatively to the downgrade by rating agency Standard & Poor's of nine European nations.
The agency stripped France of its prized triple-A status and downgraded the credit standings of eight other European countries, underscoring the systemic problems in the eurozone and signaling that the sovereign-debt crisis is yet to be resolved.
While analysts said the downgrades were widely anticipated and already priced into the market, the outlook for Europe remains uncertain.
"The downgrades set a nervous for this week's markets as we approach more significant hurdles in the evolution of the eurozone crisis," said CMC Markets' Ric Spooner said in a note.
MSCI's broadest index of Asia Pacific shares outside Japan slipped 0.3%, sliding from a one-month high reached on Friday. Japan's Nikkei average opened down 1% moving down to 1.51% in mid-morning trading.
The Hang Seng in Hong Kong dropped 1.01%, the Shanghai Composite 0.75% and Korea's Kospi was down 1%. Australia's S&P/ASX 200 slid 1.1%
Chief among market concerns is the current negotiations over the restructuring of Greek debt. While private bondholders had agreed to accept a 50% reduction on the amount they were repaid, they are yet to agree on the rate of interest being offered on newly issued bonds for the balance owing.
"Failure of these negotiations remains a significant contagion risk," Spooner said.
The euro remained under pressure from the downgrades, hitting fresh 11-year lows. It slid 0.5% against the yen to 97.13 yen, hurt by selling by Japanese exporters. Against the dollar, the euro it dipped 0.3% to $1.2641.
Euro-linked Japanese exporters fell in Tokyo. Sony dropped 2.4%, Canon tumbled 1.9% and Nikon lost 1.8%.
The cautious mood that dominated the market Monday fueled demand for Japanese government bonds; the 10-year cash JGB yield was recently down 0.5 basis point at 0.940%, while the 20-year cash JGB yield was also down 0.5 basis point at a two-month low of 1.725%. Lead JGB futures were recently up 12 points at 142.78.
Resources plays declined in Sydney amid a stronger US dollar; BHP Billiton fell 1.4%, Fortescue Metals Group dropped 2.7% and Newcrest Mining slipped 1.4%.
Australian markets will be closely watching China which posts fourth-quarter GDP data on January 17, along with December industrial output, investment and retail sales figures.
Chinese growth is forecast to hit a moderate 8.7%. If it achieves the figure, it will reinforce expectations of further monetary easing and a soft landing for China's economy.
However, if GDP fails to live up to expectations, markets may respond negatively to the risk of an export-led downturn that could be outside the control of China's monetary authorities.
Spot gold was at $1,634.80 per troy ounce, down $4.90 from its New York settlement on Friday. February Nymex crude oil futures were five cents higher at $98.75 per barrel on Globex.