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Asia markets mixed as investors react to heightened US-China trade tensions

Key Points
  • On Wednesday, Chinese Premier Li Keqiang said his country was currently facing "greater difficulties" in keeping its economy stable.
  • Li, however, insisted that China was comfortable with its economic situation.
  • Following Li's comments, Alibaba Founder and Chairman Jack Ma said his company no longer had plans to bring 1 million jobs to the U.S.

Asia markets were mixed on Thursday as investors reacted to heightened trade tensions in the ongoing spat between the United States and China.

Japan' closed near flat at 23,674.93 while the Topix index added 1.94 points, or 0.11 percent, to 1,787.6.

In South Korea, the Kospi gained 14.99 points, or 0.65 percent, to 2,323.45. Shares of rose 2.4 percent and Hyundai Motor added nearly 2 percent.

Chinese mainland markets finished slightly lower. The Shanghai composite fell 0.06 percent to 2,729.25 and the Shenzhen composite declined 3.2 points, or 0.23 percent, to 1,420.

Hong Kong's gained 0.26 percent to 27,477.67.

Chinese online services company Meituan Dianping made its trading debut in Hong Kong. The stock traded at around 72.85 Hong Kong dollars in late afternoon trade, compared to Meituan's initial public offering price of HK$69 a share, which reports said valued the company at $53 billion.

Down Under, the ASX 200 fell 20.5 points, or 0.33 percent, to 6,169.5, with most sectors declining. The energy subindex fell 0.97 percent and the heavily weighted financial sector was down 0.34 percent.

Asia-Pacific Market Indexes Chart

The session in Asia followed some gains on Wall Street, despite an escalation in trade tensions between the U.S. and China earlier in the week.

Beijing announced tariffs targeting more than 5,000 U.S. products — worth about $60 billion — will go into effect on Sept. 24. That came after the Trump administration said the U.S. will impose 10 percent tariffs on $200 billion worth of Chinese imports, and those duties will rise to 25 percent at the end of the year.

Premier Li Keqiang addressed the World Economic Forum in Tianjin on Wednesday, where he acknowledged that China is being confronted with a host of challenges and is facing "greater difficulties in keeping stable performance of the Chinese economy." But he insisted that China was comfortable with its economic situation, and that Beijing has prepared sufficient policy tools to boost the country's resilience in coping with various difficulties.

Li also said that China will not resort to competitive devaluation of the yuan amid the ongoing trade spat. While he did not directly mention the trade conflict, the prime minister said talk of Beijing deliberately weakening its currency was "groundless."

Analysts said Li's comments fortified investor sentiment.

On the same day, , founder and chairman of Chinese retail behemoth Alibaba, said his company no longer had intentions to bring 1 million jobs to the U.S., given the ongoing trade war between Beijing and Washington.

"The promise was made on the premise of friendly US-China partnership and rational trade relations," Ma said to Chinese news site Xinhua. "That premise no longer exists today, so our promise cannot be fulfilled."

In the currency market, the U.S. dollar index, which tracks the greenback against a basket of currencies, traded at 94.376 at 3:54 p.m. HK/SIN, weakening from earlier high of 94.563.

The traded at 112.18 to the dollar, while the was at $0.7273.

Oil prices rose in late-afternoon trade in Asia with U.S. crude adding 0.77 percent to $71.67 a barrel at 3:56 p.m. HK/SIN. Global benchmark Brent was up 0.37 percent at $79.69.

— CNBC's Evelyn Cheng and Reuters contributed to this report.