Hong Kong again started as the region's standout performer, with the Hang Seng Index (HSI) chalking up a 20 percent year-to-date gain -- pushing it above 24,000 points for the first time since 2022 -- thanks to another outstanding performance by Chinese tech giants.

But traders soon took their cash off the table and left the HSI swinging in and out of positive territory before ending in the red, scenes mirrored elsewhere in Asia.

The uneven start to the day came after Trump warned he would hit the European Union with 25 percent tariffs.

However, he caused some confusion over the timing and extent of other measures announced against Canada and Mexico, with analysts saying there was still some debate on whether he will delay implementation or water down his plans.

The threat against Brussels comes after Trump went back on the offensive over trade and signed a memo last weekend calling for curbs on Chinese investments in industries including technology and critical infrastructure, healthcare and energy.

Still, economists at Schroders said they were optimistic that the White House's economic policies will be milder than Trump had espoused when running for president.

"Our 'Aggressive Trump' scenario, that assumes high trade tariffs and large deportations, would be stagflationary for the US economy and probably tip the rest of the world into recession," they said in a note.

"But upside risks are also emerging. DeepSeek could speed up the adoption of AI, macroeconomic reform has come back onto the agenda for governments desperate to find growth and bank lending shows signs of life," they added, referring to the Chinese startup that upended the AI universe with its chatbot last month.

"Steep falls in oil prices could also conceivably relieve inflation pressures later in 2025."

Much of Asia spent the day flitting in and out of positive territory.

Hong Kong finished down following a thundering start to the year, while Singapore, Seoul, Taipei, manila, Bangkok and Jakarta also experienced losses.

London, Frankfurt and Paris opened lower.

However, Shanghai, Sydney, Wellington and Mumbai edged up.

Tokyo also rose, though 7-Eleven owner Seven & i tumbled 11 percent after the convenience store giant said its founding family failed to put together a white-knight buyout.

The firm rejected an offer last year worth nearly $40 billion from Canadian rival Alimentation Couche-Tard (ACT), which would have been the biggest foreign buyout of a Japanese firm.

There was no spark from Nvidia's earnings, despite the firm reporting a record $39.3 billion in revenue in the fourth quarter and CEO Jensen Huang touting "amazing" interest in its latest Blackwell chip technology.

Traders are gearing up for a key meeting of Chinese leaders next week, when they are expected to hammer out their annual economic plan amid expectations they will again target five percent growth this year, the same as in 2024.

"Policymakers tend to attach high importance to accomplishing this goal, and since targets were started in 1990, growth has only fallen notably short of target twice, in 1990 and 2022," said Lynn Song, chief China economist at ING.

"The strength of fiscal and monetary support tends to align with the year's growth target, so a stronger target implies we will also see stronger stimulus measures and vice versa."

- Key figures around 0815 GMT -

Tokyo - Nikkei 225: UP 0.3 percent at 38,256.17 (close)

Hong Kong - Hang Seng Index: DOWN 0.3 percent at 23,718.29 (close)

Shanghai - Composite: UP 0.2 percent at 3,388.06 (close)

London - FTSE 100: DOWN 0.4 percent at 8,693.53

Euro/dollar: DOWN at $1.0474 from $1.0480 on Tuesday

Pound/dollar: DOWN at $1.2668 from $1.2672

Dollar/yen: UP at 149.17 from 149.13 yen

Euro/pound: DOWN at 82.68 pence from 82.70 pence

West Texas Intermediate: UP 0.4 percent at $68.92 per barrel

Brent North Sea Crude: UP 0.4 percent at $72.79 per barrel

New York - Dow: DOWN 0.4 percent at 43,433.12 (close)

dan/dhw

Nvidia

INDEX CORP.

SCHRODERS

ING Groep

Dow