Asian markets were mixed Friday as another rally on Wall Street and data indicating a strong US economy were offset by the increasingly tense trade and technology stand-off between China and the United States.
The Brexit saga also moved back into view, with the pound at three-month lows on renewed concerns Britain will leave the EU with no deal as Prime Minister Theresa May tries to push her divorce deal through again. And oil prices sank as trade worries overshadowed tensions in the Middle East where the US and Iran are growing increasingly hostile.
New York's three main indexes rose for a third successive day on the back of better-than-expected housing construction data and a dip in US jobless claims, while solid earnings from Walmart and tech firms Cisco Systems and Nvidia reinforced optimism.
The figures boosted sentiment after almost two weeks of volatility sparked by Donald Trump's threat, and implementation, of higher tariffs on Chinese imports.
The move threw a spanner in the works for high-level China-US talks that seemed to be close to conclusion and led to a retaliation in kind from Beijing, fanning fears of a painful trade war between the economic titans.
Then on Wednesday Trump barred Chinese telecoms firms -- effectively taking aim at giant Huawei -- from the US market and added it to a blacklist restricting US sales to the firm.
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China hit out at the move and warned against further harming trade ties. But in light of the Wall Street rally, OANDA senior market analyst Jeffrey Halley said investors seem "to have temporarily given up trying to predict the fluid situation that is US-China trade relations and concentrate on the here and now".
However, Rodrigo Catril at National Australia Bank said it was "hard to get too excited as the news flows on the trade front points to an escalation rather than an ease in tensions".
He said observers were suggesting the drive against Chinese telecoms companies "effectively means the president has taken the 'nuclear option' and it has now moved towards a 'fully fledged' tech war with China".
Hong Kong fell 1.2 percent in the afternoon and Shanghai tumbled 2.5 percent while Seoul shed 0.6 percent and Taipei dived 0.9 percent with Singapore dropping 0.7 percent.
Tokyo finished 0.9 percent higher, Sydney rose 0.6 percent, Manila soared more than one percent and Mumbai jumped 0.8 percent. In early trade London fell 0.2 percent, Paris eased 0.3 percent and Frankfurt was off 0.5 percent.
Uncertainty among investors was reflected in a drop in high-yielding, riskier units, with the Chinese yuan at lows not seen since November.
The pound was also under pressure after May said she would set out her timetable for leaving office after her Brexit deal with the EU, which has already been rejected by parliament three times, goes to MPs early next month.
May has already said she will leave once Brexit is delivered but with pressure building on her some observers suggest she could step down if the vote, as expected, fails again.
Investors sold sterling on worries her likely defeat could lead to a no-deal Brexiter taking her post, which most commentators warn would hammer the economy.
In a sign of things to come, arch-Brexiter Boris Johnson has said he will run for the PM's job once it is vacated.
"The chances of a feasible Brexit solution being achieved seem to be falling by the day, much like the government's chance of re-election -- any light at the end of the tunnel being a train coming the other way," said Halley.
Oil prices retreated in the afternoon as investors fret about the impact of the China-US stand-off on demand. The drop reversed an earlier rally that came as tensions mounted in the Gulf, with crude-rich Iran rejecting negotiations with Washington following the deployment of extra US forces to the region.
Fears of a conflict have surged in the past week after the US sent an aircraft carrier strike group and B-52 bombers to the Gulf.
There has also been a drone attack on a Saudi Arabian pumping facility in the Red Sea and sabotage attacks on four ships, including two Saudi oil tankers, in the United Arab Emirates.
Iranian Foreign Minister Mohammad Javad Zarif called the US escalation "unacceptable" and said there was "no possibility" of negotiations.
Tokyo - Nikkei 225: UP 0.9 percent at 21,250.09 (close) Hong Kong - Hang Seng: DOWN 1.2 percent at 27,934.39 Shanghai - Composite: DOWN 2.5 percent at 2,882.30 (close) London - FTSE 100: DOWN 0.2 percent at 7,339.42 Dollar/yen: DOWN at 109.57 yen from 109.85 yen at 2100 GMT Pound/dollar: DOWN at $1.2780 from $1.2798 Euro/dollar: UP at $1.1180 from $1.1174
Oil - West Texas Intermediate: DOWN two cents at $62.85 per barrel Oil - Brent Crude: DOWN 17 cents at $72.45 per barrel New York - Dow: UP 0.8 percent at 25,862.
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