Hong Kong - Asian markets fluctuated Wednesday following a negative lead from Wall Street as investors grow nervous about the chances of success in China-US trade talks ahead of a crunch meeting next week.
The mood remains cautious, with the rally that has characterised the start of the year stuttering owing to a slowing Chinese economy, a softer global outlook and other issues including Brexit and the US government shutdown, which shows no sign of ending soon.
US investors turned sellers on Tuesday after the Financial Times and CNBC said Washington had rejected Beijing's offer of preparatory discussions ahead of the next round of high-level negotiations.
And while the White House denied the reports, observers said they highlighted the fragility of the talks. They also came a day after Bloomberg News said the two sides were struggling to reach agreement on the crucial matter of intellectual property, a key source of US anger.
Hopes that China and the US were on the right track have helped rally global markets in January, having suffered a torrid 2018.
But data showing China's economy grew at its weakest pace in three decades added to fears it is heading for a hard landing, while Xi Jinping also showed signs of worry about the effects of a slowdown in a speech to top provincial leaders this week.
"Investors obviously are still a little bit edgy and therefore we would expect periods of volatility to continue," Mark Hackett, chief of investment research at Nationwide Funds Group, said.
"As the headlines continue to get more nerve-wracking with regards to a global slowdown and trade wars and government shutdowns, it's easy to spook investors, but we think those are temporary versus permanent."
In early trade, Hong Kong was up 0.2% having swung back and forth in initial exchanges, while Shanghai dipped 0.1% and Tokyo ended the morning marginally higher.
Sydney and Singapore were down 0.1% while Seoul added 0.5%, with Wellington, Taipei and Manila all lower.
Oil prices were flat after taking a hit Tuesday on lingering worries about the effect of a slowdown in the global economy, and particularly China, on demand.
The commodity has jumped around a fifth from lows touched in December - having dived about 40% from early October - but investors continue to fret over the demand outlook as producers keep the taps open.
"The story behind the broad-based selling (in commodities) is an easy one: falling demand," said OANDA market analyst Edward Moya point to China's slowing growth, the IMF's decision to lower its global forecasts and downbeat outlooks from big firms this earnings season.
"US shale production continues to surge and pushing refiners to the highest pace in 15 years. Record stocks of fuel keeps the gasoline glut in focus," he added.
Tokyo - Nikkei 225: FLAT at 20 631.54 (break)
Hong Kong - Hang Seng: UP 0.2% at 27 051.12
Shanghai - Composite: DOWN 0.1% at 2 577.96
Euro/dollar: UP at $1.1366 from $1.1361 at 21:40 GMT
Pound/dollar: DOWN at $1.2954 from $1.2957
Dollar/yen: UP at 109.58 yen from 109.37
Oil - West Texas Intermediate: UP five cents at $53.06
Oil - Brent Crude: UP eight cents at $61.58 per barrel
New York - DOW: DOWN 1.2% at 24 404.48 (close)
London - FTSE 100: DOWN 1.0% at 6 901.39