Asia markets were mostly down in a choppy trading session Wednesday, despite a positive finish in Wall Street overnight.

Hong Kong's Hang Seng index gave up morning gains to trade down 0.46 percent. In China, the Shanghai composite slipped 0.24 percent, while the Shenzhen composite was down 0.46 percent.

Japan's Nikkei 225 gave up early gains of as much as 1 percent to trade 1.52 percent down. Across the Korean strait, the Kospi was dropped 0.18 percent.

Down Under, the S&P/ASX 200 was down 0.57 percent, weighed by losses of 3.45 percent in the energy sector.

Rodrigo Catril, a currency strategist at the National Australia Bank, said in a morning note, "The global equity rally that began on Friday has started to show signs of fatigue," noting that most European indices ended marginally lower on Tuesday. The positive finish in the US was partly due to indexes there playing catch up after a long weekend, he said.

The US market was closed on Monday for the President's Day holiday.

But analysts at Barclays had a different take, suggesting in a note that the gain in US equities overnight was driven by "consumer discretionary, industrials and financials," adding that risk aversion was mostly subdued despite the overnight fall in oil prices. US core retail sales data topped expectations on Friday, rising 0.6 percent in January after an unrevised 0.3 percent slip in December.

Jeff Knight, global head of investment solutions at Columbia Threadneedle Investments told CNBC's "Squawk Box" that rallies in stock markets, like the one on Wall Street overnight, should be looked at with the bigger picture in mind.

"It's important to keep it in perspective of what's been going on this year, not to get too lulled by strong up days," he said, pointing out that despite recent gains made by major indexes around the world, many of them are still sharply down on year-to-date.

"Big up days often times don't signal the all clear," he said. "They just simply represent the upside of the volatility that's affecting markets in both directions."

Overnight, a Bank of America Merrill Lynch fund manager survey for February showed market pros had gotten so nervous that portfolio managers' cash allocations were at November 2001 highs.

In Asian hours, US crude futures came off session high of USD 29.47 to trade up 0.45 percent at USD 29.17, after slipping 1.36 percent overnight. Global benchmark Brent climbed as much as USD 32.83 before giving up some of the gains to trade up 0.84 percent at USD 32.45 a barrel.

Energy plays across the board were mostly lower, with Santos shedding 2.93 percent, Woodside Petroleum falling 6.36 percent and Inpexdown 5.77 percent.

Oil briefly rallied in the overnight session after Saudi Arabia, Russia, Qatar and Venezuela said they would lead an effort to freeze output at January levels, dashing hopes of a cut in production.

Evan Lucas, market strategist at IG, wrote in his morning epistle, "OPEC nations will freeze production at January levels, which was 43.1 million barrels of oil a day. Interesting, considering January levels were a record and were producing 1 million barrels a day above demand. That, coupled with EIA stockpiling, registered record levels in January."

This is the first major accord of its type in 15 years, with the last accord in 2001, and the one before in 1998.

Lucas said, "What also makes this accord interesting is that history would suggest Russia is the one to watch. It was the first to break the 2001 and 1998 accords due to 'not enough action' taken by other OPEC nations."

"The agreement is not signed and nor is there signs it will even materialise considering the clause around other nations acting," he added.

Iran, which re-entered the international market this year after US-led sanctions on the Persian state were lifted, swiftly said it would not reduce its share of the oil market. Reuters, citing sources familiar to the matter, reported that the OPEC member could be offered special terms under a global deal to freeze oil production levels.

Japan's economic growth prospects received a slight boost this morning when government data showed core machinery orders, which exclude ships and electric power utilities, for December rose 4.2 percent on-month and that companies expect orders to accelerate further in January-March quarter.

The uptick fell short of the market's expectation of a 4.7 percent rise but followed a 14.4 percent decline in November.

Exporters were mixed with Toyota falling 2.98 percent while Sharp was up 2.65 percent. The dollar-yen pair traded down 0.28 percent at 113.75. Overnight, the dollar gained against most G10 currencies with the exception of the yen. A stronger yen is usually a negative for export stocks as it reduces their overseas profit when converted into local currency.

Shares of Takata were down 1.97 percent. Overnight reports said US carmarker General Motors was recalling about 200,000 vehicles of its former brands Saab and Saturn because they had potentially defective air bag inflators made by Takata.

Softbank shares extended gains from Tuesday to trade up 9.84 percent after the internet and telecom giant announced a 500 billion yen share buyback plan.

Major US indexes closed up overnight with the Dow Jones industrial average up 222.57 points, or 1.39 percent, at 16,196.41 while the S&P 500 closed higher 30.80 points, or 1.65 percent, to 1,895.58. The Nasdaq composite gained 98.44 points, or 2.27 percent, to 4,435.96.

On the data front, South Korea will release its PPI and unemployment numbers for January while Taiwan will announce its fourth quarter final GDP for 2015.

In corporate earnings, the likes of Domino's Pizza, IAG, Bridgestone, Axiata, OCBC, and Sembcorp industries will announce their earnings numbers.

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First Published:Feb 17, 2016 10:50 AM IST