Shares in Asia were mixed on Thursday as investors watched ongoing negotiations between the U.S. and China, with the two economic powerhouses reportedly closer to striking a deal to end a protracted trade dispute.
Mainland Chinese markets closed higher, with the Shanghai composite adding 0.94% to 3,246.57 and the Shenzhen component rising about 0.73% to 10,415.80. The Shenzhen composite also gained 0.447% to 1,780.02.
Over in Hong Kong, however, the Hang Seng index declined about 0.5%, as of its final hour of trading.
The Nikkei 225 in Japan rose fractionally to close at 21,724.95, while the Topix slipped 0.11% to end at 1,620.05.
Shares of Apple supplier Japan Display soared 8.33% by the time of market close, following a Reuters report that the company would supply organic light-emitting diode (OLED) screens for the Apple Watch later this year.
The supply deal would mark Japan Display's foray into the OLED display market, Reuters reported, citing two sources familiar with the matter. The company currently supplies liquid crystal display screens for the iPhone XR.
Australia's declined 0.83% to end at 6,232.80 as the sectors declined, with the energy subindex dropping 1.86 percent as shares of oil companies fell. Santos shed 2.18%, Beach Energy dropped 4.31% and Woodside Petroleum slipped 2.07%.
High-level trade negotiations between China and the U.S. resumed on Wednesday in Washington. Hopes were high that both countries were closer to a deal, with U.S. President Donald Trump planning to meet with Chinese Vice Premier Liu He on Thursday in Washington.
White House economic advisor Larry Kudlow told reporters Wednesday that China has acknowledged for the first time that the United States has legitimate gripes about IP theft, forced technology transfer and cyber hacking.
"They have for the first time acknowledged that we have a point. Several points," Kudlow told reporters at an event hosted by The Christian Science Monitor. Previously, he said, "they were in denial."
"A lot of the news around the trade negotiations, I think ... is priced in to the markets. I think markets are expecting a pretty comprehensive deal to come through, timing still uncertain," Rob Subbaraman, head of emerging markets economics at Nomura, told CNBC's "Street Signs" on Thursday.
"To really give the markets another lift, we need to see some of the existing tariffs, whether it's on the $50 billion or the $200 billion, actually rolled back," Subbaraman said.
"News that a US-China trade agreement is virtually a done deal has fuelled optimism," Vishnu Varathan, head of economics and strategy at Mizuho Bank, wrote in a morning note. "But markets may be converging too quickly on the 'done' before the 'deal.'"
Varathan said there remained "landmines" in the implementation and enforcement of any deal that might emerge, citing examples such as Washington's demands that Beijing "gives up its right of retaliation" if the U.S. "unilaterally but proportionally imposes tariffs on China's non-compliance."
"A deal that needs to be done is not quite the same as a done deal," he said.
The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 97.099 after seeing levels above 97.2 yesterday.
Oil prices declined in the afternoon of Asian trading hours, as the international benchmark Brent crude futures contract was 0.35% lower at $69.07 per barrel and U.S. crude futures declined 0.32% to $62.26 per barrel.
— Reuters and CNBC's Lauren Feiner contributed to this report.