HONG KONG  - Asian markets mostly fell Monday, with Tokyo tumbling almost three percent after data showed Japan's economy had slipped into recession.

Hong Kong was lower and Shanghai higher in afternoon trading on the first day of a landmark link-up between the two exchanges. A day after G20 leaders pledged to boost the global economy by $2 trillion in four years, Tokyo authorities said Japan's GDP had contracted for a second straight quarter, fuelling expectations of a snap election and the delay of a planned sales tax rise.

Tokyo stocks -- which had surged more than 10 percent this month -- tumbled 2.96 percent, or 517.03 points, to 16,973.80.

Sydney lost 0.77 percent, or 41.8 points, to end at 5,412.5 and Seoul was flat, dipping 1.51 points to 1,943.63.

Shanghai closed down 0.19 percent, or 4.81 points, at 2,474.01 and Hong Kong sank 1.21 percent, or 290.30 points, to 23,797.08.

Official figures showed the Japanese economy shrank 0.4 percent quarter-on-quarter -- an annualised rate of 1.6 percent -- in July-September, confounding forecasts of 0.5 percent growth.

It followed a revised 1.9 percent contraction in April-June -- or 7.3 percent at an annualised rate.

Two consecutive quarters of contraction is considered a technical recession.

The figure makes it almost inevitable that Prime Minister Shinzo Abe will delay a sales tax rise due next October and call snap elections for next month.

The economy expanded in the first three months of the year, but an April 1 increase in sales tax -- aimed at repaying a huge national debt -- hammered consumer spending and slammed the brakes on a nascent recovery.

Last month the Bank of Japan moved to kickstart growth again by expanding its already vast monetary easing programme -- sending the Nikkei stock index surging and yen plunging -- but the latest data will lead to speculation of further measures.

- Snap elections -

"In light of the sharp fall in today's preliminary estimate, it now looks likely that PM Abe will call off the hike and announce snap elections," Marcel Thieliant from Capital Economics said in a report following the data release.

The announcement briefly sent the dollar above 117 yen before retreating to 115.92 yen, against 116.26 yen in New York Friday.

The euro fetched $1.2531 and 145.27 yen compared with $1.2523 and 145.66 yen.

Shares in Hong Kong reversed initial gains despite the start of the exchange link with Shanghai, which is expected to see billions of dollars in cross-border transactions each day.

But while Hong Kong investors bought their daily allowance of Shanghai shares before the end of trade, mainlanders used up just a tenth of their quota, suggesting they are holding back.

Jackson Wong, associate director at Simsen International Financial Group, told AFP: "Northbound (trading) is many times higher than southbound. That means Chinese investors are not blindly buying HK stocks. It's not a bad sign."

The two markets have enjoyed strong gains since the launch date was announced and Zhang Gang, senior analyst at Central China Securities, told Dow Jones Newswires: "Now that the stock trading link has materialised, all the expectations have been fulfilled and people need to take a breather.

"But I am still optimistic about the medium-term prospects of the market, especially if China further relaxes its monetary policy to support the slowing economy."

Oil prices were lower. US benchmark West Texas Intermediate for December delivery fell 82 cents to $75.00, while Brent crude for January was down $1.11 to $78.30.

Gold was at $1,186.55 an ounce, compared with $1,152.81 late Friday.

Singapore closed down 0.81 percent, or 27.00 points, to 3,288.67.

Singapore Telecom fell 0.51 percent to Sg$3.93 while real estate developer Capitaland was down 0.31 percent to Sg$3.24.

Jakarta closed 0.09 percent higher or 4.45 points, to 5,053.94.

Palm oil producer Astra Agro Lestari rose 1.29 percent to 23,550 rupiah, while car maker Astra International fell 0.70 percent to 7,125 rupiah.

Mumbai advanced 0.47 percent, or 131.22 points, to end at 28,177.88 points.

State Bank of India gained 5.44 percent to 2,940.15 rupees, while ICICI Bank lost 1.27 percent to 1,673.65 rupees.

-- Bangkok closed down 0.43 percent or 6.81 points to 1,569.07.

Power giant Electricity Generating gained 2.05 percent to 174.00 baht, while oil company PTT fell 1.03 percent to 384.00baht.

-- Kuala Lumpur fell 7.31 points, or 0.40 percent, to close at 1,806.48.

RHB Capital went down 0.47 percent to 8.45 ringgit while Maybank lost 0.10 percent to 9.55. Public Bank gained 0.33 percent to 18.26 ringgit.

-- Taipei fell 1.10 percent, or 98.49 points, to 8,884.39.

Taiwan Semiconductor Manufacturing Co. slipped 1.48 percent to Tw$133.0 while Hon Hai Precision Industry was 1.24 percent lower at Tw$95.6.

-- Wellington added 0.11 percent or 6.23 points to 5,490.23.

Meridian Energy was up 1.49 percent at NZ$1.705, while Spark fell 0.15 percent to NZ$3.26.

-- Manila rose 0.17 percent, or 12.38 points, to 7,229.72.

Retailer SSI Group was up 4.8 percent at 8.51 pesos while BDO was gained 0.28 percent to 106 pesos. Philippine Long Distance Telephone fell 0.13 percent to 2.992 pesos.