Asia Pacific markets saw losses throughout the region by Monday afternoon, as shares in Hong Kong tumbled amid worsening tensions in the city.
Chinese mainland markets chalked up losses by the close: The Shanghai composite was down 1.83% to 2,909.07 and the Shenzhen composite declined 2.26% to 1,611.44. The Shenzhen component index lost 2.17% to 9,680.57.
In Hong Kong, the Hang Seng index was deep in negative territory, declining 2.62% by the close as political turmoil in the city worsened. At least two protesters were said to be injured when local police opened fire on Monday at mass demonstrations. Over the weekend, three pro-democracy lawmakers were arrested.
Sectors across the board in the Hang Seng index tumbled, including property developers, tech, financial, as well as gaming stocks.
Japan's Nikkei 225 reversed early gains to trade down 0.26% to close at 23,331.84 while the Topix index edged down to 1,704.03.
South Korea's Kospi fell 0.61% to close at 2,124.09 as major chipmaker SK Hynix slid 1.22%.
In Australia, the benchmark ASX 200 defied the general downward trend in the region and rose 0.72% to 6,772.50.
MSCI's broadest index of Asia-Pacific shares outside Japan fell 1.17%.
On the earnings front, Singapore's DBS Bank reported a stronger-than-expected rise in its third-quarter net profit, which jumped 15% year-on-year to 1.63 billion Singapore dollars ($1.19 billion). Its third-quarter net interest income was up 8% to $2.46 billion Singapore dollars.
DBS shares in Singapore were down 0.34%.
Last Thursday, trade optimism rose after China's Commerce Ministry said that Beijing had agreed with Washington to lift existing trade tariffs between the two countries in phases.
Hopes of alleviating that trade fight, which has hampered the global growth outlook and created uncertainty for businesses, dampened when U.S. President Donald Trump said Friday he has not agreed to scrap tariffs on Chinese goods.
Both sides are working to sign what the White House has described as a "phase one" trade deal.
"US-China trade tensions will continue to drive currencies this week," currency strategists at the Commonwealth Bank of Australia wrote in a morning note. They said the dollar could "edge higher this week," driven by trade developments and it could potentially diminish expectations for further rate cuts from the U.S. Federal Reserve.
Citi analysts said in a note that they expect at most a "rollback of the September tariffs only along with a suspension of the December tariffs contingent on achieving a Phase 1 deal." The next tariff deadline is Dec. 15.
"We expect a high degree of uncertainty to remain even if a tariff rollback is achieved," the analysts wrote, explaining that investment and financial frictions between the world's two largest economies are likely to continue.
The dollar last traded at 98.31 on Monday afternoon, almost flat against a basket of its peers.
Elsewhere, the Japanese yen changed hands at 109.02 per dollar, strengthening from an earlier low of 109.25. The Australian dollar traded at $0.6856, declining from around $0.6900 from the previous week.