Asian markets were mixed on Thursday as China poured cold water on US President Donald Trump's comments talking up the prospects of a deal to end their trade war.

In Hong Kong, the benchmark Hang Seng Index fell 0.74 percent to end at 21,909.96.

Trump said on Wednesday that Washington would have a "fair deal with China" and that there was direct contact "every day". On Tuesday he had said tariffs would "come down substantially".

But China said on Thursday that there were no negotiations ongoing.

"Any claims about the progress of China-US economic and trade negotiations are groundless and have no factual basis," Commerce Ministry spokesman He Yadong said.

"China urges the United States to correct its wrong practices, show the sincerity needed for talks [and] return to the correct track of equal dialogue and consultation," He said.

On Wednesday Trump's comments, as well as his insistence that he has "no intention" of firing the head of the US Federal Reserve, Jerome Powell, boosted markets.

The broad-based S&P 500 finished 1.7 percent higher on Wednesday. European markets also rose but in early trade on Thursday headed lower, with Frankfurt down over a percent.

Trump could also exempt car parts from some tariffs on China alongside those on steel and aluminium in a "destacking", the Financial Times reported.

On Thursday Tokyo pared back earlier gains to close 0.5 percent higher, while Sydney added 0.6 percent and Shanghai ended flat.

Seoul fell after official data showed South Korea's economy unexpectedly contracted 0.1 percent in the first quarter.

"Both US equities and government bonds have staged a relief rally over the past 24 hours, as concerns about Fed independence and the trade war have eased," said Hubert de Barochez at Capital Economics.

"But the fact that the rally was sparked largely by conciliatory remarks from US President Trump – whose rhetoric is notoriously volatile – raises questions about its durability," de Barochez said. (AFP)