TOKYO – Wall Street stock futures weakened in early trading on Monday, setting a tough tone for Asian markets after tit-for-tat between US and China came into force and intensified investors' gloom expectations of global growth prospects.
E-mini futures for the US S & P500 fell as much as 1.06 percent in early trade and last reached 0.68 percent at 2,905, while Chicago-traded Nikkei futures suggest Japan's Nikkei is on course to fall 0.7 percent.
MSCI's broadest index of Asia-Pacific shares outside Japan, which lost 4.7 percent last month, is likely to remain under pressure.
The United States dropped 1
A number of studies suggest that the tariff rates will cost US households up to $ 1000 per tonne. the year and the last round will hit a significant number of US consumer goods.
In retaliation, China began to impose additional tariffs on some of the US goods on a target list of $ 75 billion. Beijing did not specify the value of goods meeting higher tariffs from Sunday.
Many market participants said that the market's reaction was likely exaggerated by algorithmic player flows in thin trading conditions at the start of Asian trading on Monday.  Liquidity may be even more limited than usual due to a US market holiday on Monday.
"(Marketing) shows you how many data mining algae are involved in stock links compared to the forex link. Was anyone surprised by these tariffs that went into effect yesterday?" Said Takeo Kamai, executive director of CLSA in Tokyo .
Despite the volatility, the move reflects lower investors' underlying concerns about rising costs of the Sino-US trade war for the global economy.
An official survey published on Saturday showed factory activity in China shrunk in August for the fourth consecutive month, further evidence of hits to the world's second-largest economy from the trade war.
Tensions are also high in Hong Kong, with police and protesters clashing in some of the most intense violence since the turmoil erupted more than three months ago, as Beijing's concern undermines democratic freedom in the territory.
Thousands of protesters blocked roads and public transport links to Hong Kong Airport and police made several arrests after protesters smashed CCTV cameras and lamps with metal bars and disassembled station swivels.
China, eager to curb the unrest before the 70th anniversary of the founding of People's Rep. China on October 1, has accused foreign powers, especially the United States and the United Kingdom, of causing the unrest.
Oil prices also fell at the beginning of Monday trading.
Brent commodity futures fell 0.68 percent to $ 58.85 a barrel, while US West Texas Intermediate (WTI) crude oil lost 0.54 percent to $ 54.80 a barrel.
The foreign exchange market was calmer for now, with the dollar down slightly to the yen at 106.12 yen, down 0.13 percent from late US levels.  The euro stood almost flat at $ 1.09905, not far from the two-year low of $ 1.0963 in US trade on Friday.