HONG KONG, March 14 — Asian markets mostly fell today as traders track developments in the Ukraine war and diplomatic efforts to bring the crisis to an end, while this week’s Federal Reserve meeting is in focus as it prepares to start lifting interest rates.

Oil prices dropped, providing some respite after they soared to a near 14-year high last week, though the commodity remains elevated around US$110 and keeping upward pressure on inflation.

Trading floors continue to be flooded with uncertainty as Russia’s war in Ukraine rages, with comments from Vladimir Putin that there were "positive developments” in talks with Kyiv unable to provide much support.

US National Security Adviser Jake Sullivan is due to meet senior Chinese diplomat Yang Jiechi in Rome later today, with Ukraine top of the agenda as the White House seeks help in bringing the crisis to a swift conclusion.

Beijing has declined to directly condemn Moscow for launching its invasion, and has repeatedly blamed Nato’s "eastward expansion” for worsening tensions between Russia and Ukraine, echoing the Kremlin’s prime security grievance.

Investors are also nervously awaiting the Fed’s latest policy gathering, which is expected to end Wednesday with the bank announcing a quarter-point interest rate hike.

The meeting comes as the US central bank tries to walk a fine line between trying to rein in runaway inflation while also trying to support the world’s biggest economy in the face of the war in Ukraine, which many fear could lead to another recession.

"We are experiencing extraordinary volatility in global equities compounded by wavering market sentiment, and the risk of recession intensifies on spiralling commodity prices,” Louise Dudley at Federated Hermes said.

"We expect ongoing swings in the short term as geopolitical uncertainty over Russian crude persists.”

The prospect of higher borrowing costs has seen the dollar rally across the board, hitting multi-year highs against the yen, pound and euro.

After another drop on Wall Street, Asia struggled.

Hong Kong led losses, shedding 4.7 per cent and falling below 20,000 for the first time in almost six years.

Tech firms were among the worst-hit owing to concerns over China’s crackdown on the sector and as the country’s tech hub Shenzhen was put into lockdown.

Shanghai, Seoul, Singapore, Taipei, Manila and Wellington also fell, though Tokyo, Sydney, Mumbai and Jakarta rose.

Oil prices slipped despite strict sanctions on Russia that have seen the United States ban crude imports from the country, and following the announcement of a pause in negotiations to restore the 2015 nuclear agreement between Iran and world powers.

The news comes just as it appeared a deal was close, which would have allowed Tehran to sell its crude on world markets again, easing a supply crisis.

The setback came after Russia said it was demanding guarantees that the Western sanctions imposed on its economy following its invasion of Ukraine would not affect its trade with Iran.

Key figures around 0710 GMT

Tokyo — Nikkei 225: UP 0.6 per cent at 25,307.85 (close)

Hong Kong — Hang Seng Index: DOWN 4.7 per cent at 19,592.80

Shanghai — Composite: DOWN 2.6 per cent at 3,223.53 (close)

Brent North Sea crude: DOWN 2.3 per cent at US$110.12 per barrel

West Texas Intermediate: DOWN 2.5 per cent at US$106.59

Dollar/yen: UP at 117.83 yen from 117.26 yen Friday

Euro/dollar: UP at US$1.0917 from US$1.0908

Pound/dollar: DOWN at US$1.3019 from US$1.3030

Euro/pound: UP at 83.85 pence from 83.70 pence

New York — Dow: DOWN 0.7 per cent at 32,944.19 (close)

London — FTSE 100: UP 0.8 per cent at 7,155.64 (close) — AFP