Asia Pacific markets traded mostly lower on Monday as investors remained cautious over global growth prospects while Chinese President Xi Jinping tried to position China as a globalization champion in a major speech.
Xi's opening speech kicked off the week-long China International Import Expo that seeks to promote the world's second largest economy as a major consumer of global goods. The event, announced more than a year ago, will stand in contrast to the ongoing trade fight between Beijing and Washington.
During the speech, Xi repeated his rhetoric against protectionism and promoted his country as an advocate for international openness and cooperation. He discussed at length about the benefits of an open international economy and said that China is pursuing "a new round of high-standard opening up" to broaden market access to the rest of the world.
The United States has levied tariffs on an extensive list of Chinese products. Beijing, for its part, unsuccessfully tried to negotiate on tariffs by offering to buy more U.S. goods, but ultimately responded with duties on products from the U.S.
The impact of the ongoing trade war is being felt as companies report higher production costs and trim outlook. On Friday, Chinese tech giant Alibaba lowered its full-year sales forecast, citing concerns about the economic impact of the trade war.
Xi's speech at the expo comes a day before Americans head to the polls for midterm elections.
Asia Pacific markets
In Japan, the Nikkei 225 fell 344.67 points, or 1.55 percent, to 21,898.99 while the Topix index declined 18.37 points, or 1.11 percent, to 1,640.39. South Korea's Kospi was down 19.08 points, or 0.91 percent, at 2,076.92.
Chinese shares traded lower. The Shanghai composite declined 11.04 points, or 0.41 percent, to 2,665.43 while the Shenzhen composite closed fractionally lower at 1,351. In Hong Kong, the Hang Seng index fell 2.08 percent in afternoon trade.
The on-shore yuan traded at 6.9203 to the dollar Monday afternoon while the off-shore yuan fetched 6.9161. China's central bank set the yuan mid-point at 6.8976 against the greenback — the People's Bank of China allows the exchange rate for the on-shore yuan to rise or fall 2 percent from the official midpoint rate set every morning.
Australia's struggled for gains, finishing down 31.10 points, or 0.53 percent, at 5,818.10 as most sectors declined. The energy sector fell 1.31 percent as oil stocks mostly sold off. Shares of Santos fell 1.55 percent, Oil Search was down 1.31 percent and Woodside Petroleum declined 2.28 percent.
Iran sanctions and central banks
Oil prices will be closely watched as U.S. on Monday reimposed oil and financial sanctions on Iran, ratcheting up the pressure on Tehran to curb its nuclear, missile and regional activities.
Iran said it plans to defy the newly reimposed U.S. sanctions and continue selling its oil in the international market.
Last week, reports said that President Donald Trump's administration will grant eight jurisdictions special exceptions to continue importing oil from Tehran, with the idea that they will gradually reduce their purchases over time. Oil prices fell last Friday on the back of that news as investors remained concerned about oversupply in the market.
U.S. crude traded down 0.52 percent at $62.81 a barrel Monday afternoon while global benchmark Brent was down 0.3 percent at $72.61.
Central banks in the United States, Australia and New Zealand are set to meet this week.
"There is not expected to be any change in policy from either central bank. But we continue to expect the Fed to lift interest rates 25 bpts in December to 2.50 (percent)," Richard Grace, chief currency strategist and head of international economics at the Commonwealth Bank, wrote in a morning note.
Slowing global growth remains a concern for investors — last month, the International Monetary Fund cut global growth forecast, citing trade tensions between the U.S. and its trading partners.
There have been other indications of a slowdown in growth momentum, including a decline in Purchasing Managers Indexes, an indicator of economic health in the manufacturing and services sectors, across much of Asia, according to Felicity Emmett from ANZ Research.
"In an environment of cooling growth and declining liquidity, market volatility seems unlikely to decline to the soporific days of old any time soon," Emmett said in a morning note.
Currency markets
In the currency market, the dollar index, which measures the U.S. currency against a basket of its peers, traded at 96.431, retreating from an earlier high of 96.519.
The British pound traded at $1.3004, up from levels around $1.2800 in the previous week. The gains followed a local newspaper report that suggested Prime Minister Theresa May has secured a Brexit deal with Brussels that will allow Britain to stay in a customs union and avoid a hard border in Northern Ireland.
But Reuters reported that May's office has dismissed the report as "speculation."
The traded at 113.19 to the dollar while the traded at $0.7189.
— CNBC's Evelyn Cheng contributed to this report.