Asia markets were subdued in early morning trade, with investors watching how U.S.-China trade talks progress on Friday.

The ASX 200 was up 0.16 percent in morning trade, despite the heavily weighted financials subindex slightly lower. Gains were seen in the materials sector as well as gold producers.

The Kospi was down 0.31 percent with declines seen in the autos and tech sectors. Index heavyweight Samsung Electronics, which resumed trade on Friday after a halt, hovered around the flat line.

Japan markets are closed on Friday for a holiday.

The Dow Jones industrial average carved out gains of 5.17 points to close at 23930.15, while the other major U.S. indexes closed down moderately.

U.S. Treasury Secretary Steve Mnuchin is leading a group of Trump administration officials to meet with Chinese officials and discuss trade between the two nations.

Shortly before the talks were set to take place in Beijing, the mood between the world’s two largest economies worsened amid reports the U.S. administration is considering taking action to restrict some Chinese firms’ ability to sell telecommunications equipment.

“Substantive progress on IP protections and cutting the US goods/trade deficit with China by a fixed amount seem some way off, or unlikely,” ANZ analysts said in a note.

Wall Street also eyed Washington amid more news regarding Trump’s legal troubles. In an interview, Rudy Giuliani, Trump’s lawyer, said the president repaid his personal lawyer Michael Cohen for a hush payment to porn star Stormy Daniels.

Elsewhere, HSBC is due to report its first quarter earnings later on Friday. In Australia, Macquarie Group announced its full year results, with full year net profit at $2.56 billion Australian dollars ($1.92 billion). Its shares were up 1.88 percent in early morning trade.

In currencies, the dollar traded at 109.10 against the yen at 8:07 a.m. HK/SIN, which was slightly below Thursday’s session low of 109.14. The dollar index, which tracks the greenback against a basket of currencies, last traded at 92.420 — below a four-month high hit earlier this week.

Oil prices rose slightly after gains seen in the last session, when investors were focused on the possibility of the U.S. imposing sanctions against Iran.

Brent crude futures rose 0.23 percent to trade at $73.79 a barrel. U.S. West Texas Intermediate crude rose 0.16 percent to trade at $68.53 a barrel.

This is the economic calendar for Friday (All times in HK/SIN) :

• 9:45 a.m.: China Caixin Services PMI
• 12:00 p.m.: Malaysia trade data

— CNBC’s Fred Imbert and Thomas Franck contributed to this report.