Markets in Asia were mixed on Monday with investors watching out for developments on the U.S.-China trade situation, as negotiations are set to continue in Beijing later this week.
The mainland Chinese markets, which were offline much of last week due to the Lunar New Year holidays, saw gains on the day. The Shanghai composite rose 1.36 percent to close at 2,653.90 while the Shenzhen component jumped 3.059 percent to finish its trading day at 7,919.05. The Shenzhen composite gained 2.897 percent to close at 1,347.94.
In Australia, the slipped 0.18 percent to close at 6,060.80. The heavily weighted financial subindex fell 1.15 percent as shares of the country's so-called Big Four banks declined. Australia and New Zealand Banking Group shed 1.3 percent, Commonwealth Bank of Australia slipped 1.24 percent, Westpac fell 1.53 percent and National Australia Bank declined 1.62 percent.
Japan's stock markets were closed on Monday for a holiday.
Investors will be watching for developments on the U.S.-China trade front, with a new round of negotiations set to be held in Beijing later this week.
The Wall Street Journal reported Friday that the two countries have not yet put together a draft on the matters they agree or disagree. It comes as both Washington and Beijing are attempting to strike a deal on trade before a key March deadline, following which additional tariffs will be slapped on Chinese imports to the U.S.
"The reality is that olive branches, rather than rose stalks, are the best that anyone (anchored to reality) may be looking for," said Mizuho Bank in a morning note.
It pointed to "restraints" overhanging those talks.
"First, as of late last week, President Trump had declared that he would not be meeting with President Xi before the deadline (1st Mar) on the US-China trade truce expires," the note said.
"However, Trump has also categorically stated that there will be no US-China trade deal till he and President Xi have met. Therefore that is as good a guaranteeing that there will be no deal before the US-China truce expires." That, the note said, not only "contradicts" Trump's earlier tweets enthusing about a deal in the works, but also "begs the question" of whether that meant higher tariffs on Chinese imports.
One economist told CNBC that the "best case" outcome of the talks would be an "extension of the planned implementation" of the increase in tariffs.
"The problem that we have is that there's a lot of complacency in the market about assuming that the best case actually happens," David Mann, global chief economist at Standard Chartered Bank, told CNBC's "Street Signs" on Monday. "Everyone's assuming there will be no ... further rises in tariffs this year," he said.
The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 96.665 after seeing an earlier low of 96.619.
— CNBC's Fred Imbert contributed to this report.