Chinese stocks rose and the yuan fell on Friday morning ahead of the implementation of major tariffs that will move the trade row between the United States and China to a new level and cloud the global economic outlook.
This drove European vehicle stocks sharply higher and dragged up wider markets.
After falling as much as almost 1 percent, China's Shanghai Composite Index rose 0.6 percent to 2,750.72.
Upbeat economic data and overnight gains on US stock markets helped temper concerns but trading volume was light.
Hong Kong's Hang Seng index gained 0.5 percent to 28,315.62, while South Korea's Kospi added 0.7 percent to 2,272.87. The Dow Jones Industrial Average gained 0.8 percent to 24,356.74.
Index heavyweight Fast Retailing tumbled 2.5 percent. President Donald Trump made clear Thursday that USA tariffs against Chinese imports will take effect early Friday and that he's prepared to sharply escalate a trade war between the world's two biggest economies.
India's Sensex was little changed, Indonesia's Jakarta Composite index was declining 0.2 percent and the Taiwan Weighted fell over 1 percent while Singapore's Straits Times index was rising 0.2 percent. Australia's S&P-ASX 200 rose 0.9 percent to 6,272.30.
But these could be just the first skirmishes in a trade war between the world's top two economies, with financial markets anxious about a knock-on effect on the wider global economy and the broader trading system.
However, Hikaru Sato, senior technical analyst at Daiwa Securities, said the market "has already factored in" this stage of the US-China trade battle and is looking towards the next spat.
"The Trump administrations trade war is finally upon us", said Stephen Innes, Asia-Pacific head of trading at OANDA.
Beijing has vowed to immediately respond with an equal amount of tariffs of its own against USA autos, agricultural and other products, though it is unclear how swiftly the actions could escalate into an all-out trade war.
Benchmark U.S. crude dropped 16 cents to $72.78 per barrel in electronic trading on the New York Mercantile Exchange. The contract plunged $1.20, or 1.6 percent, to settle at $72.94 per barrel Thursday. Brent crude, used to price global oils, lost 31 cents to $77.08 per barrel in London. It slid 85 cents on Thursday.
The dollar strengthened to 110.77 yen from 110.60 yen while the euro rose to $1.1692 from $1.1691.
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