Asian Stock markets ended flat Monday as the optimism over Europe's moves to tackle the region's debt crisis faded and lackluster data from China also weighed.

Global markets rallied Friday after EU leaders agreed to create a single euro zone banking supervisory body and let rescue funds be sent directly to the struggling banks, instead of adding to the public debt of their national governments.

While the policies agreed by EU Leaders are a step in the right direction they are on their own unlikely to resolve the euro-zone sovereign debt crisis, Lee Hardman, currency economist at Bank of Tokyo-Mitsubishi UFJ, told Reuters.

Japanese shares pared earlier gains and ended flat. Benchmark Nikkei fell 0.04 percent or 3.30 points to 9,003.48. Exporter companies' shares gained after the Bank of Japan's Tankan survey showed a forecast of growth in the manufacturing sector for the third quarter but gave up gains in the last hour of trading on stronger yen.

The survey showed that large Japanese manufacturer's sentiment index was improved to -1 in June from -4 in March. Big manufacturers also forecast conditions to improve over the next three months with an average +1 reading against analysts' estimation of -3.

Among the stocks, Sony Corp. fell 0.53 percent and Panasonic Corp. plunged 2.18 percent while Toshiba Corp. gained 0.67 percent.

Chinese shares ended flat after official data showed that manufacturing activity in the world's second largest economy slowed further in June. Chinese Shanghai Composite gained 0.03 percent or 0.68 points to 2226.11 while Hong Kong's Hang Seng was closed for holiday.

Data released Sunday by the National Bureau of Statistics and China Federation of Logistics and Purchasing show that official Purchasing Managers' Index (PMI) continued to decelerate in June, falling to 50.2 from 50.4 in May, the lowest reading since November 2011, when it hit 49. However, the reading above 50 indicates expansion and it also tops analysts' estimation of 49.9.

Among the stocks, SAIC Motor Corp. slumped 8.47 percent and FAW CAR Co, Ltd plunged 6.54 percent while Agricultural Bank of China Ltd. fell 0.39 percent.

South Korean Seoul Composite fell 0.13 percent or 2.36 points to 1851.65 and Indian benchmark BSE Sensex rose 0.29 percent. Among the stocks, Hyundai Motor Co. gained 1.29 percent and Kia Motors Corp advanced 0.80 percent in Seoul while Cairn India Ltd gained 2.11 percent and Suzlon Energy Ltd. advanced 1.08 percent in India.

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