BEIJING - Asian markets fluctuated after data showing China slipped into deflation compounded worries about the world number two economy's faltering post-Covid recovery.
The mood on trading floors was already glum after another sell-off on Wall Street fuelled by fresh concerns over the banking sector and talk of another possible Federal Reserve rate hike.
The 0.3 percent drop in China's July consumer prices was the first since the start of 2021 and comes as slowing domestic spending weighs on the country's economic recovery.
Investors were already in a dour mood a day after China announced its biggest drop in exports since the beginning of the pandemic more than three years ago, while imports also tanked owing to slimming demand at home.
An extended period of disappointing indicators out of Beijing this year has ramped up pressure on authorities to provide much-needed support to the economy.
Shanghai extended the week's losses, while Tokyo, Wellington, Mumbai and Taipei were also in the red. However, Hong Kong bounced late in the day, joining gains in Sydney, Seoul, Manila, Bangkok and Jakarta.
London, Paris and Frankfurt rallied in the morning, helped by a bounce in banks.
Traders are now keenly awaiting the release of US inflation data Thursday, hoping for an idea about the Fed's plans for rates.