Asian markets retraced much of their early gains on Wednesday afternoon, with Chinese mainland markets dropping particularly sharply.
The Shanghai composite closed down 70.25 points, or 2.31 percent, at 2,972.56, after falling as much as 4 percent earlier in the session, as traders continued to trim holdings on concerns over the country's state-owned enterprises. The Shenzhen composite lost 86.68 points, or 4.42 percent, to close at 1,871.51.
Nomura, in a note Wednesday, advised taking money off the table in China's market.
"We are nearing the point where things are as good as they get for the first half of 2016: China's growth is stabilizing, so is the renminbi exchange rate to the U.S. dollar and capital outflows, while consensus forecasts show low likelihood of a June Fed rate hike," the Nomura analysts said.
"In coming months, rising default among private and state-owned enterprises credit and closure of zombie companies as part of supply-side reforms, could raise headline risk," they added.
Japanese stocks extended gains from the previous session on the back of a relatively weaker yen, with the benchmark Nikkei 225 advancing 32.10 points, or 0.19 percent, to 16,906.54, having been up more than 1 percent earlier.
Across the Korean Strait, the Kospi gave up morning gains to close down 5.53 points, or 0.27 percent, at 2,005.83. Australia's ASX 200 added 27.18 points, or 0.52 percent, to 5,216, led by a 2.07 percent gain in the materials sub-index. In Hong Kong, the Hang Seng index dropped 1.36 percent as of 3:21 p.m. HK/SIN time.