Image copyright Getty Images

Japanese shares hit a one-year low in Monday trade following big falls in the US and as oil prices dropped below $28 a barrel for the first time since 2003.

The benchmark Nikkei 225 closed down 1.1% at 16,955.57 - its lowest close in a year.

In Australia, investors also reacted to falling oil prices.

The benchmark S&P/ASX 200 closed down 0.7% at 4,858.70, with energy-related stocks and banking shares weighing on the index.

BHP Billiton shares fell 3%, Woodside lost 2.6%, and Santos shares fell 8.4%.

The country's big lenders also saw falls on Monday, with ANZ's shares down 2% and Westpac's down 1%.

In South Korea, the benchmark Kospi index closed flat at 1,878.45 after spending much of the day in negative territory.

Eyes on China

Image copyright Getty Images Image caption China's housing sector accounts for some 15% of the country's economy

In China, analysts said they expected markets to be hurt further this week by falling oil prices, together with continued worries about the country's economic growth. China's latest quarterly gross domestic product numbers are out on Tuesday.

Housing data released on Monday showed house prices rose 1.6% in December from a year earlier. The country's housing market accounts for about 15% of the economy and the latest numbers mark the third consecutive month of year-on-year gains.

Hong Kong's Hang Seng index closed down 1.5% at 19,237.45, while the Shanghai Composite finished the day 0.44% higher at 2,913.84.