HONG KONG — Asian markets edged up tentatively Thursday as a sense of stability returns after the turmoil earlier in the week, though investors remain alert to any signs of another flare up in the China-US trade spat.

Bargain buyers took advantage of the cheap valuations after Tuesday’s blow-out that came in response to the world’s top two economies threatening each other with tariffs on a mind-boggling amount of imports.

However, analysts warned the next plunge could come at any moment, while central bankers voiced concerns about the impact a trade war could have on the global economy.

US traders gave their Asian counterparts a mixed lead, with the Nasdaq hitting a new record close thanks to a surge in tech giants, while the Dow and S&P 500 finished in the red.

Tokyo ended the morning session 0.8 percent higher, with the yen weakening as investors shifted out of the safe-haven unit.

Hong Kong edged up 0.3 percent and Shanghai rose 0.5 percent — the two were the worst hit by Tuesday’s selling frenzy — and Sydney jumped more than one percent while Seoul was marginally higher.

Wellington jumped more than one percent after data showed that while New Zealand’s economy cooled in January-March, interest rates are not expected to rise in the near term.

Stephen Innes, head of Asia-Pacific trading at OANDA, said markets were “unsure if we’re in the calm after the storm, the lull between storms or even in the eye of the hurricane”.

But he added: “There’s certainly a pattern forming that while equity markets quiver during the trade dispute, stocks come roaring back with (Facebook, Apple, Amazon, Netflix and Google) consistently leading the charge.

“Despite the huge question mark over global trade, Wall Street quickly returns focus to the US economy, which there is no denying is doing exceptionally well.”

Trump’s protectionist America First agenda has also seen him threaten tariffs on steel and aluminium from the European Union and on Wednesday the bloc outlined retaliatory measures against several US goods such as blue jeans and motorcycles.

The upheaval has spooked the heads of the world’s central banks, who said Wednesday they were seeing confidence already being hit, forcing them to reconsider their forecasts for growth.

While the US economy is humming, Federal Reserve boss Jerome Powell warned at a European Central Bank conference in Portugal: “Changes in trade policy could cause us to have to question the outlook.

“For the first time, we’re hearing about decisions to postpone investment, postpone hiring.”

His remarks were in line with those of his peers including from Japan and Australia, while ECB head Mario Draghi said: “There have been lessons one can learn from the past. They are all negative.”

On currency markets the pound continues to struggle as British Prime Minister Theresa May pushed through key Brexit legislation but still faces pressure to pick up the pace of talks with the EU ahead of a planned March withdrawal.

Oil prices were mixed following a dip in US stockpiles and ahead of the start Friday of a key OPEC meeting, where kingpin Saudi Arabia and non-member Russia are pushing for an increase in output.

While a hike is expected some members of the cartel are against the move, including Iran and Venezuela who complain the proposed hike is the result of pressure from the United States.

“The market is still in search of some semblance of clarity,” Innes said, but added: “While clarity brings power, I suspect it will also bring waves of volatility as we’re indeed headed for some collision.” — AFP