For some investors, it was also a time to take profit on recent gains. At Bursa Malaysia, the FBM KLCI was among the least affected, shedding 0.35% compared to Shanghai Composite Index's 3.35%.
At 12.30pm, the FBM KLCI fell 4.1 points to 1,170.39. Turnover was 346.85 million shares valued at RM394.65 million. There were 203 gainers, 320 losers and 201 counters unchanged.
Light crude oil fell 46 cents to US$73.91 while crude palm oil futures fell RM16 to RM2,359.
Shanghai's Composite Index fell 3.35% to 2,893.03, Hong Kong's Hang Seng Index 1.1% lower at 20,306.75, Singapore's Straits Times Index shed 0.5% to 2,598.28 and Japan's Nikkei 225 0.56% lower at 10,521.27.
However, in Beijing, a senior government economist said Chinese investors have over-reacted to talk of monetary policy fine-tuning, and the recent sell-off in the stock market will be short-lived.
A Reuters report quoting Lu Zhongyuan, vice-head of the Development Research Centre, said he expected share prices to recover gradually because the recovery in China's economy was solid.
"Stock market confidence has been affected by the over-reaction to recent comments of 'dynamic fine-tuning' by the central bank," said Lu, whose think-tank reports to the State Council, China's cabinet.
Lu said the recent swoon in Shanghai shares was also due to the market's excessively rapid rise earlier in the year.
At Bursa Malaysia, BAT fell 70 sen to RM45, Tanjong and MISC-F 22 sen to RM15.06 and RM8.65 while PPB lost 16 sen to RM15.18 and SP Setia 13 sen to RM4.47 while Padini gave up 12 sen to RM2.58.
Pharmaniaga lost 24 sen to RM4.30 but with only 100 shares done. Hartalega eased 17 sen to RM4.90 after the recent rally following the interest in glove markers due to the A (H1N1) virsus.
KTB was the most active with 18.2 million shares done. Multi Sports fell 0.5 sen to 64 sen, or 21 sen below its offer price of 85 sen.
Chuan Huat surged 23 sen to 77 sen in active trade despite the lack of any corporate news but it scheduled to announce its results this week.
Nestle rose 28 sen to RM33.50 with 1,500 shares done while Discomp gained 18 sen to 35.5 sen, Aeon 13 sen to RM4.60, Kim Hin 7.5 sen to RM1.02 while Coastal gained seven sen to RM2.