The mixed session seen in Asia, along with the steep declines in China, came after new tariffs on U.S. goods announced by China on Friday pushed the trade dispute between the two countries back into the spotlight. China said it was preparing levies, ranging from 5 percent to 25 percent, on around $60 billion in U.S. imports, including many agriculture-related goods.
China said the latest duties would be implemented if the U.S. proceeded to impose more tariffs on Chinese goods. U.S. President Donald Trump had earlier this month asked the U.S. Trade Representative to consider increasing proposed tariffs on $200 billion worth of Chinese goods to 25 percent, from an initially announced 10 percent rate.
"In the last couple of months, the idea of a trade war is being used as an excuse by the asset allocators to rotate out of all emerging markets and what that's done is to create a sort of a liquidity flow, which has made it very difficult for market indices to fight against," Mark Tinker, head of Framlington Equities Asia at AXA Investment Managers, told CNBC's "Squawk Box."
"There's no doubt that there's a lot of noise in what is a quiet season for a lot of investors," he added.
In foreign exchange, the offshore yuan was mostly flat after firming on Friday when the People's Bank of China moved to stabilize the currency following recent weakness.
The offshore yuan last traded at 6.8491 to the dollar — stronger than Friday's intraday weak point, which exceeded 6.9. The on-shore yuan, meanwhile, pared earlier gains to trade at 6.8397 to the dollar. Before the market open, the central bank had fixed the yuan mid-point at 6.8513, its lowest level since May 31, 2017.
The dollar index, which tracks the greenback against a basket of currencies, was firmer at 95.301 at 3:15 p.m. HK/SIN. Against the yen, the dollar was traded at 111.27.
Wall Street had gained on Friday as investors digested the latest jobs data. Nonfarm payrolls rose by 157,000 in July, missing the 190,000 forecast in a Reuters poll, although the broad employment picture remained strong.
On the earnings front, HSBC, Europe's largest bank, said profit before tax went up by 4.58 percent year-over-year to $10.71 billion in the first-half of 2018 after posting a surprise fall in profit in the first quarter. HSBC's shares in Hong Kong erased gains of more than 1 percent before the lunch break to trade flat at 3:17 p.m. HK/SIN.
Elsewhere, Singapore lender OCBC saw its shares rise 2.82 percent by 3:17 p.m. HK/SIN after it announced net profit rose 16 percent from one year ago. Still, the bank was cautious about its outlook, saying that the operating environment was "increasingly challenging."
— CNBC's Yen Nee Lee contributed to this report.