With governments around the world trying to figure out how to respond to the US president's tariffs agenda and threats of further measures, equities have been plunged into turmoil amid uncertainty about what is to come.

While attention has been mostly on the trade saga in recent weeks, Wednesday provided a little relief as data showed US consumer inflation slowed slightly more than expected in February -- the first full month of Trump's second term.

The report also revealed core inflation, which excludes volatile food and energy prices, had come in below consensus.

But the overriding issue for investors is Trump's trade policy, which this week saw him impose tariffs on all imports of steel and aluminium, hitting numerous nations from Brazil to South Korea, as well as the European Union.

Canada responded with more than US$21 billion in additional tariffs on US goods, while Brussels said it would target $28 billion in US goods from April.

There has been a growing concern among investors that Trump's tariffs and pledges to slash taxes, regulations and immigration would reignite inflation, force the Federal Reserve to hike interest rates again and cause a recession.

Analysts pointed out that the latest inflation figures, while welcome, had to be taken in context.

National Australia Bank's Tapas Strickland said it was "worth noting the data was for February and thus largely pre-dates any potential tariff impacts".

And Stephen Innes at SPI Asset Management warned that while markets reacted positively to the data, there was still a lot of uncertainty in markets.

"Let's be clear, this isn't a free pass to rally unchallenged. The real question now is how far Trump is willing to push on tariffs and government cuts," he wrote in a commentary.

"With April 2's reciprocal tariff D-Day looming, traders would be foolish to dismiss his resolve to rewrite global trade," he added, referring to another round of levies due to come into effect.

"If the past few weeks have proven anything, his tolerance for the 'pain trade' (US stocks lower) is far higher than the market assumed."

After a mixed start to the day, most Asian markets headed south in the afternoon.

Tokyo, Hong Kong, Shanghai, Sydney, Singapore, Wellington, Taipei, Mumbai and Jakarta were all in negative territory.

Mark Hackett at Nationwide said that "for the last three weeks, traders have felt like buying this market is like trying to catch a falling knife".

Focus is also turning to developments in the Ukraine crisis after Kyiv endorsed a US proposal for a 30-day ceasefire, with Washington saying it wants Russia to agree to an unconditional halt to hostilities.

The Kremlin said it was awaiting details of the US proposal, and gave no indication of its readiness to stop fighting, but Trump warned "devastating" sanctions were possible if Russian President Vladimir Putin refused an agreement.

- Key figures around 0710 GMT -

Tokyo - Nikkei 225: DOWN 0.1 percent at 36,790.03 (close)

Hong Kong - Hang Seng Index: DOWN 0.9 percent at 23,400.21

Shanghai - Composite: DOWN 0.4 percent at 3,358.73 (close)

Euro/dollar: DOWN at $1.0877 from $1.0890 on Wednesday

Pound/dollar: DOWN at $1.2952 from $1.2969

Dollar/yen: DOWN at 147.81 yen from 148.32 yen

Euro/pound: UP at 83.99 pence from 83.97 pence

West Texas Intermediate: DOWN 0.3 percent at $67.50 per barrel

Brent North Sea Crude: DOWN 0.2 percent at $70.80 per barrel

New York - Dow: DOWN 0.2 percent at 41,350.93 points (close)

London - FTSE 100: UP 0.5 percent at 8,540.97 (close)

dan/pjm

NATIONAL AUSTRALIA BANK

INDEX CORP.

Dow