Asian shares edged up on Friday after index publisher MSCI announced it would raise the weight of Chinese mainland shares in its global benchmarks, while strong US economic data lifted the dollar.

China's blue-chip CSI300 index surged 2.2 per cent to finish off its best week since November 2015, after MSCI said it would quadruple the weighting of China's A-shares in its global benchmarks later this year, potentially drawing more than $80 billion of fresh foreign inflows to the world's second-biggest economy.

That, along with strength in other markets in the region, helped push MSCI's broadest index of Asia-Pacific shares outside Japan up 0.3 per cent.

Shares in Europe are seen following Asia higher, with financial spreadbetters expecting London's FTSE and Frankfurt's DAX to open 0.5 per cent higher. Paris' CAC is expected to rise 0.3 per cent at the open.

Friday's Chinese stock rally follows a strong run this year, with major indexes posting their best month in nearly four years in February, driven by expectations for government stimulus and policy support, as well as optimism over US-China trade talks.

“Just two months ago China was facing one of the worst years it has ever had in terms of equity market performance. So I think investors are taking very seriously the fact that the rebalancing of MSCI is happening,” said Jim McCafferty, head of equity research, Asia ex-Japan at Nomura.

“There's a disconnect between China's place in the world economy and China's place in the world's stock markets. And the two things can't be diverged for so long,” he said.

Elsewhere in the region, Japan's Nikkei 225 ended 1 per cent higher, helped by a weaker yen, while Australian shares added 0.4 per cent.

The gains in Asia contrast with a weaker finish on Wall Street on Thursday. The Dow Jones Industrial Average fell 0.27 per cent to 25,916 points, the S&P 500 lost 0.28 per cent to 2,784.49 and the Nasdaq dropped 0.29 per cent to 7,532.53.

US President Donald Trump on Thursday fuelled concerns over trade talks between the US and China, warning that he could walk away from a trade deal with China if it were not good enough.

But in subsequent comments Thursday, White House economic adviser Larry Kudlow called progress in the negotiations “fantastic” and said the countries were “heading towards a remarkable, historic deal.”

Mixed messages on trade combined with the collapse of the summit between President Trump and North Korean leader Kim Jong Un on denuclearisation, and data from China showing slowing factory activity to pressure US stocks.

“News that President Trump walked out of the meeting with Supreme Leader Kim, because the two sides couldn't reach an agreement over North Korea's nuclear disarmament, dashed hopes for an easing in geopolitical tensions,” analysts at ANZ said in a morning note.

South Korea's financial markets are closed Friday for a public holiday.

HIGHER YIELDS

Better-than-expected US economic growth in the fourth quarter had little impact on US stocks. Gross domestic product rose 2.9 per cent for the year, just shy of the 3 per cent goal set by the Trump administration.

The GDP data lifted yields on benchmark 10-year Treasury notes. After rising to a high of 2.7222 per cent on Friday, the yield eased to 2.7204 per cent, still up from a US close of 2.711 per cent on Thursday.

Dallas Federal Reserve Bank President Robert Kaplan said on Thursday that it will take time to see how much the US economy is slowing, supporting views of the Fed's rate-hike holiday at least through to June.

The dollar also rose on the US data, adding 0.4 per cent against the yen to 111.80, having earlier touched a new high for the year at 111.82..

The dollar index which tracks the greenback against major rivals, was up 0.2 per cent at 96.302.

In commodity markets, US crude added 0.8 per cent to $57.67 a barrel, and Brent crude rose 1 per cent to $66.95 per barrel.

Spot gold fell 0.3 per cent on the stronger dollar, to $1,309.35 per ounce.

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