By Agence France-Presse Hong Kong led a sell-off in Asian markets during holiday-thinned business Monday as trade tensions burst back on the scene with China and the US swapping fresh tariffs and reports saying Beijing pulled out of planned talks. Oil has been boosted by a producers' decision to maintain output levels despite pressure from Donald Trump to lower prices (AFP Photo/Frederic J. BROWN/MANILA BULLETIN) The recent optimism in the US economy that saw equities rack up healthy gains over the past two weeks was replaced by fresh concerns about the impact of a standoff between the world's top two economies. Hong Kong bore the brunt of the selling, giving up 1.8 percent in late trade, while Sydney fell 0.1 percent and Wellington shed 0.4 percent. Mumbai and Jakarta both lost more than one percent. However, volumes were low with Tokyo, Shanghai, Seoul and Taipei all closed for public holidays. Media reports said Chinese officials had called off a trip to the US for fresh talks on averting an all-out trade war and the two sides were unlikely to meet up before the US mid-term elections in November. The news comes as Washington imposed 10 percent duties on another $200 billion of Chinese goods Monday. China hit back at $60 billion of imports in retaliation and accused the US of using false accusations on trade to "intimidate" other countries. While the measures are a significant step up in the row -- the US will be taxing about half the goods it imports from China once the new tariffs are imposed -- traders took the low rates as a sign they could reach a deal eventually. However, uncertainty is dogging trading floors and the International Monetary Fund has warned about the potential for "significant economic costs," including slower growth. Fitch Ratings has cut its growth estimates for China and the world for 2019. "Make no mistake, this will be a bumpy ride and don't underestimate the possibility of the US announcing reviews of further China tariffs at some point in time given the Trump administration 'modus operandi' of applying non-stop pressure," said Stephen Innes, head of Asia-Pacific trading at OANDA. He added that "traders remain in wait and see mode while treading rather gingerly" in Asia. On currency markets the pound struggled to recover after suffering deep losses Friday after British Prime Minister Theresa May's Brexit plan was brushed off by EU officials and she said talks were "at an impasse". The dollar also rose against most emerging market and high-yielding units after they enjoyed a much-needed boost last week. The South Korean won, Indonesian rupiah, South African rand and Mexican peso were down between 0.2 and 0.4 percent. Oil surged almost two percent after the world's top producers decided to maintain output during a meeting in Algeria at the weekend, in an apparent rebuff to pressure from Donald Trump to lower prices. A committee comprised of OPEC and non-OPEC producers said it was satisfied with the current market outlook, which represented "an overall healthy balance between supply and demand". Key figures around 0650 GMT Hong Kong - Hang Seng: DOWN 1.8 percent at 27,445.51 Tokyo - Nikkei 225: Closed for a holiday Shanghai - Composite: Closed for a holiday Euro/dollar: DOWN at $1.1730 from $1.1752 at 2040 GMT on Friday Pound/dollar: DOWN at $1.3070 from $1.3085 Dollar/yen: DOWN at 112.50 yen from 112.58 yen Oil - West Texas Intermediate: UP $1.27 at $72.05 per barrel Oil - Brent Crude: UP $1.57 at $80.37 per barrel New York - Dow Jones: UP 0.3 percent at 26,743.50 (close) London - FTSE 100: UP 1.7 percent at 7,490.23 (close)