Asian markets traded lower on Monday, following a global sell-off late last week amid fears that rising tensions between the United States and China could lead to a full-blown trade war.
In Australia, the benchmark ASX 200 opened lower, trading down 0.57 percent at 5,787.4 in morning trade. The heavily weighted financial sector was down 0.81 percent.
Major banking stocks in the country fell — shares of ANZ declined 0.92 percent, Commonwealth Bank was down 0.69 percent and the National Australia Bank declined 0.86 percent. Westpac shares were down 0.35 percent.
In Japan, the Nikkei 225 fell 1.02 percent in early morning trade. The Topix index was down 0.83 percent. Across the Korean Strait, the Kospi fell 0.41 percent.
Beijing on Friday said it may target 128 US products with an import value of USD 3 billion in response to President Donald Trump's executive order earlier this month that imposed broad duties on foreign aluminum and steel imports.
Trump had also announced tariff plans for up to USD 60 billion in Chinese imports, although China did not officially connect its Friday threats of retaliation to that White House action.
On Saturday, some of the world's top economists and business leaders at the China Development Forum in Beijing warned about the risks of a trade war between the two economic powerhouses. Nobel-prize winning economists Robert Shiller and Joseph Stiglitzpredicted pain ahead for the U.S. economy if Beijing and Washington ramp up tit-for-tat trade penalties.
One market commentator said there was "clearly a fair amount of damage done" from the week's developments, after markets sold off in Asia, Europe and the United States.
"Whether this is the sole cause of latest risk market ructions is debatable," Ray Attrill, head of foreign exchange strategy at the National Australia Bank, wrote in a morning note. He added that others were suggesting confidence in continued strong synchronized global growth may be slipping, following disappointing economic data.
He added that "rising geopolitical tension" should also be noted, following the tapping of John Bolton to be Trump's new national security advisor.
"This has heightened concerns that Trump will formally repudiate the 2015 nuclear deal with Iran that Bolton is on record as saying was a mistake," Attrill said.
In the currency market, the dollar index traded at 89.498, falling from levels above 90.3 in the previous week.
Among currency majors, the Japanese yen traded at 104.84 to the dollar, strengthening from levels above 106 last week. Major export stocks in the country traded mixed — Toyota shares fell 0.65 percent, Honda declined 0.75 percent while Canon rose 0.42 percent.
A relatively strong yen is usually a downside for exporters because it reduces their overseas profits when converted into the local currency.
Elsewhere, the Australian dollar fetched USD 0.7716 and the euro traded at USD 1.2358.Oil prices traded up on Monday morning with US crude higher by 0.64 percent at USD 66.29 a barrel. Global benchmark Brent rose 0.53 percent to USD 70.82.