[HONG KONG] Asian markets mostly fell on Friday, tracking losses on Wall Street as optimism over the China-US trade talks was trumped by a weak round of US data that revived concerns about economic growth.
With high-level negotiations between the world's top economies still taking place in Washington there has been little concrete news about their progress, though some reports have said the two are heading towards an eventual deal.
The lack of information on the crunch talks led dealers in New York to take their cue from figures showing home sales at a three-year low, while sales of durable goods missed expectations. All three main indexes on Wall Street ended lower.
The data, coupled with disappointing readings from the eurozone and Japan, reminded investors that while China and the US are showing signs of reaching a deal, the world economy continues to stutter.
"Trade talks remain on track, but with little details on what the next moves are as the March 1 deadline approaches, the market paid more attention to the lower-than-expected US data on Thursday," said OANDA senior market analyst Alfonso Esparza.
The losses on Wall Street filtered through to Asia, where markets have enjoyed a broadly healthy week.
Tokyo ended the morning down 0.4 per cent, Hong Kong slipped 0.6 per cent and Shanghai eased 0.3 per cent, while Seoul and Singapore each retreated 0.4 per cent.
Taipei and Jakarta were also down, though Sydney and Wellington rose.
'DON'T CHASE THE RALLY'
And Richard Turnill, global chief investment strategist at BlackRock, warned that the stellar gains seen so far this year were unlikely to continue for the next 10 months.
"Don't chase the rally," he told Bloomberg TV. "Don't extrapolate the double-digit gains we've seen in the first six weeks of this year."
On Thursday China's Commerce Ministry said the two sides would "go a step further in deepening their communication" regarding the trade talks but despite Donald Trump's tweets that things are going well, there is scepticism among observers.
"I think the consensus of people that have been following this thing is that they're not making nearly as much progress as the president tweets that they've been making," said William Reinsch, a former US trade official now at the Center for Strategic and International Studies.
With the March 1 deadline approaching, China's top negotiator Liu He is reported to be planning to meet Mr Trump on Friday.
On currency markets the dollar held gains against most other currencies as the soft US data sparked a shift by investors towards the safer option, while the pound remains under pressure from ongoing Brexit uncertainty.
The Australian dollar was down but recovered pared losses that came on the back of a report that China had banned coal imports from the country, with tensions between the two becoming strained over Canberra's decision to ban telecoms giant Huawei's 5G equipment over security risks.
However, Treasurer Josh Frydenberg played down the reports, insisting no coal import ban had been put in place.