Financial shares had the second largest drop as all four big banks opened lower and NAB traded ex-dividend.
NAB was down 4.68 per cent to $24.24, Commonwealth was down 1.27 per cent to $72.57, ANZ was down 1.25 per cent to $26.10 and Westpac was down 0.81 per cent to $26.90.
The Shanghai Composite index slipped 0.2% to 2,883.61 while Japan's Nikkei 225 gave up 0.6% to 21,067.23.
Deepening its trade battle with the US and sending financial markets spinning, China announced tariff hikes Monday on $60 billion of American goods in retaliation for President Donald Trump's latest penalties on Chinese products.
Trump hinted at the possibility of a trade deal with China, adding that Washington is in a much stronger position than Beijing.
"US stocks are recovering from yesterday's drop in early action, which was the largest one-day fall since January, with the escalated trade tensions between the United States and China continuing to be eyed", Charles Schwab analysts said. "Now who knows what has to be accomplished before a deal can be reached?"
Bank stocks also fell sharply.
The Dow dove 711 points, or 2.7%, to 25,230 as of 1:24 p.m. Trade-sensitive tech companies suffered the largest percentage decline.
Earlier Tuesday Asian markets had plunged further in reaction to Monday's U.S. stock plunge, seen after China hiked tariffs on $60 billion of USA imports.
On Friday, around 5,700 categories of Chinese-made goods bound for the United States were subject to a 25 percent tariff, up from 10 percent. The new penalties also took aim at American farmers, driving down soybean and cotton prices.
China's rates will target a number of American imports with tariffs rising to as high as 25 percent, according to a statement by the Tariff Policy Commission of the State Council - China's cabinet.
"The measure taken by the U.S. escalated trade frictions and violated the consensus reached by both sides to tackle trade disputes through consultations", the authorities said in a statement issued by the Customs Tariff Commission of the State Council.
Sudan charges al-Bashir with killing protesters
The protests have so far given them the only leverage they have against the military council and they are not about to let it go. Demonstrators converged on the military complex last month seeking the army's help in ousting him.
Authorities puzzle over German crossbow deaths
Police said the three victims found on Saturday, were a 53-year-old man and two women aged 33 and 30, all of them German citizens. Hotel staff in Passau had on Saturday discovered the three dead Germans in their room around noon alongside two crossbows.
‘Pikachu’ tries to dethrone the ‘Avengers,’ but just misses
Top territories include Russian Federation with $2.4 million, Germany with $1.8 million, and Australia with $1.8 million. Between both the domestic and foreign box offices , Detective Pikachu has earned a combined total of US$170.4 million.
Beijing is running out of US imports for penalties due to the lopsided trade balance between the world's two largest economies.
The Chinese response was announced soon after Trump warned Beijing not to retaliate.
USA officials said the Chinese negotiators have been reversing themselves on commitments made in earlier trade talks.
But Beijing appeared to dig in.
The statement said China hopes that the U.S. will return to bilateral economic and trade consultations, to meet each other halfway and strive to reach a mutually beneficial and win-win agreement. Rather than insist his trade war with China will eventually work out for the best, he insists it is already coming up roses.
Trade talks between the US and China concluded Friday with no agreement and with the USA increasing import tariffs on $200 billion of Chinese goods to 25% from 10%.
The Aussie dollar is buying US69.52¢, from US69.75¢ on Monday. I said great benefits of the tax cuts, which. They said that loss could widen to one percentage point if both sides extend penalties to all of each other's exports.
Chinese Vice Premier Liu He talks with U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin as he departs a round of trade talks in Washington on Friday.
Aircraft manufacturer Boeing later said it remained "confident" US-China trade talks would yield an agreement.
Beijing announced shortly after that it was hitting more than 5,000 categories of USA products with tariffs of five to 10 percent.
Elsewhere, European shares dropped more than 1% after the European Union said it was finalizing a list of US goods to target in the event Trump imposes levies on auto imports. Very bad for China, very good for USA! President Trump has pledged to broaden tariffs even further to all Chinese imports - including big-ticket items. This should have been done by our leaders many years ago.