Southeast Asian stocks fell on Monday, with the Vietnam index losing nearly five percent, as mounting fears over a virus outbreak drove a steep sell-off in Chinese stocks after markets reopened following extended holidays for the Lunar New Year.

The death toll from the new coronavirus in China's central province of Hubei rose by 56 to 350 on Monday, state television said, citing official figures.

In a bid to support the economy, the central bank of China - the region's biggest trading partner - unexpectedly cut interest rates on reverse repurchase agreements and pledged to inject US$174 billion of liquidity into markets.

The Shanghai Composite Index shed nearly nine percent despite the measures, while MSCI's broadest index of Asia-Pacific shares outside Japan was on track for an eighth straight session of losses.

Shares in trade-reliant Singapore dropped over one percent, weighed down by real estate stocks, with index heavyweights Mapletree Commercial Trust and Capitaland Commercial Trust diving 1.7 percent and 1.5 percent respectively.

"Sentiment remains very fragile as markets dynamically try to get a sense of when containment will catch up with contagion," Vishnu Varathan, a senior economist at Mizuho Bank, said in a note to clients.

"Until then, backstops and stabilization may be more a punctuation in the "risk-off" environment, rather than a turnaround in sentiment," Varathan said.

Economic data from China added to the gloom as factory activity slowed in January, while annual industrial profit also fell in the world's second-largest economy.

Leading losses in the region, Vietnam stocks dropped 4.8 percent and suffered their worst session since October 2018, dragged down by financial and real estate sectors.

Vietjet Aviation JSC fell seven percent to hit its lowest since June 20 last year, after Vietnam during the weekend declared a public health emergency over the coronavirus epidemic and briefly halted all flights to and from China including Hong Kong, Macau and Taiwan.

Malaysian equities extended losses for a tenth straight session to hit their lowest since August 2015, with leading decliners Top Glove Corp Bhd and telecom firm Axiata Group Bhd shedding nearly two percent each.

Indonesian shares fell as much as one percent, weighed down by consumer and communication stocks.