Asian stocks edged down Thursday as investors fretted over US-China tariffs which are due to kick in within hours and threaten to trigger a trade war between the world's top two economies.
A public holiday in the US meant no lead from Wall Street for anxious traders to follow.
But with the US due to begin enforcing tariffs on more than $34 billion in Chinese imports from Friday, and Beijing vowing to respond with its own tariffs immediately, fears are growing over the consequences for global trade.
Greg McKenna, chief market strategist at AxiTrader, said as the tariff deadline looms, “There has been a subtle but distinct shift in the number of voices who are now saying this could all end up in a big global mess with a huge hit to global growth”.
Traders may have underestimated the resolve of the US administration to pursue President Donald Trump's protectionist agenda, he said.
Hong Kong shares were down 0.2 percent, while Shanghai lost 0.1 percent.
Tokyo slipped 0.2 per cent in morning trade, while Seoul and Taipei also posted losses.
Washington describes the tariffs as retribution for Beijing's theft of American technology and other unfair trade practices.
It has vowed to introduce even steeper US counter-measures, potentially covering another $400 billion in Chinese goods, if Beijing retaliates.
China's finance ministry vowed this week that it “absolutely will not” fire the first shot, but had made preparations to take “necessary measures” against any US tariffs.
Meanwhile, oil prices eased off recent highs after Trump fired a warning shot at OPEC.
“The OPEC Monopoly must remember that gas prices are up & they are doing little to help,” Trump tweeted, adding: “REDUCE PRICING NOW!”
Shares in HKICIM, the Hong Kong-listed subsidiary of HNA Group whose co-founder died after falling off a wall in France Tuesday, lost 2.1 percent.
The sprawling Chinese conglomerate had been selling assets including its shares in the Hilton hotel empire to pay down its loans, amid a Beijing crackdown on debt-fuelled financing.
Traders are also watching for key data from the US including payroll figures and Federal Reserve meeting minutes later this week.
– Key figures around 0300 GMT –
Hong Kong – Hang Seng: DOWN 0.2 percent at 28,196.73
Tokyo – Nikkei 225: DOWN 0.2 percent at 21,684.27
Shanghai – Composite: DOWN 0.1 percent at 2,756.52
Euro/dollar: UP at $1.1662 from $1.1640
Pound/dollar: UP at $1.3228 from $1.3216
Dollar/yen: DOWN at 110.39 from 110.54 yen
Oil – West Texas Intermediate: DOWN two cents at 73.85 per barrel
Oil – Brent Crude: DOWN 16 cents at 77.69 per barrel
New York – Dow: Closed for national holiday
London – FTSE 100: DOWN 0.3 percent at 7,573.09 points (close)