In the currency market, the dollar dipped slightly against the yen.
Global stock prices fell on Monday after the United States and China imposed new tariffs on each other’s goods, reinforcing investors’ worries over slowing global growth
The E-mini futures for US S&P500 ESc1 fell as much as 1.06% in early trade and last stood down 0.39%.
Japan's Nikkei .N225 shed 0.28%.
MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS dropped 0.3%, led by 0.5% drop in Hong Kong's Hang Seng .HSI after another weekend of violent anti-government protests.
But mainland Chinese shares fared better, with the CSI300 index .CSI300 rising 0.3% despite the trade row escalation.
China’s State Council said on Sunday it will increase adjustments of economic policy. A private survey on Monday showed factory activity unexpectedly expanded in August, though gains were modest and contrasted with official data that pointed to further contraction.
US President Donald Trump slapped 15% tariffs on a variety of Chinese goods on Sunday - including footwear, smart watches and flat-panel televisions - while China imposed new duties on US crude, the latest escalation in a bruising trade war.
A variety of studies suggest the tariffs will cost US households up to $1,000 a year, with the latest round hitting a significant number of US consumer goods.
In retaliation, China started to impose additional tariffs on some of the US goods on a $75 billion target list. Beijing did not specify the value of the goods that face higher tariffs from Sunday.
“So far Trump appears defiant though on the tariff hikes, blaming the Fed and American companies for their difficulties in dealing with the tariffs,” said Shane Oliver, chief economist at AMP in Sydney.
“There is a long way to go though and re-establishing trust will be difficult after the experience since mid-last year. Share markets may still have to fall further to pressure Trump to resolve the issue.”
Many market players say the market’s reaction was likely exaggerated by algorithm-driven players’ flows in thin trading conditions at start of Asian trade on Monday.
Liquidity could be even more limited than usual because of a US market holiday on Monday.
“(The market move) goes to show you how many data mining algos are involved with equity linked compared to forex-linked. Was anyone surprised by these tariffs that took effect yesterday?” said Takeo Kamai, head of execution at CLSA in Tokyo.
Tension is also running high in Hong Kong, with police and protesters clashing in some of the most intense violence since unrest erupted more than three months ago over concerns Beijing is undermining democratic freedoms in the territory.
Thousands of protesters blocked roads and public transport links to Hong Kong airport and police made several arrests after demonstrators smashed CCTV cameras and lamps with metal poles and dismantled station turnstiles.
China, eager to quell the unrest before the 70th anniversary of the founding of the People’s Republic of China on Oct. 1, has accused foreign powers, particularly the United States and Britain, of fomenting the unrest.
Oil prices also fell on Monday.
Brent crude LCOc1 futures fell 0.49% to $58.96 a barrel while US West Texas Intermediate (WTI) crude CLc1 lost 0.18% to $55.00.
In the currency market, the dollar dipped slightly against the yen to 106.12 yen JPY=.
The euro stood almost flat at $1.09905 EUR=, not far from two-year low of $1.0963 hit in U.S. trade on Friday.