Asian markets swing as dealers battle uncertainty

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."