Asian markets mostly managed to eke out gains Wednesday, tracking yet another record on Wall Street, with hopes for a possible breakthrough in deadlocked US stimulus talks.

However, China-US tensions and fresh virus flare-ups in parts of the world -- and the reimposition of new containment measures -- continue to hang in the background.

Some upbeat US data helped propel the S&P 500 to its first record since February while the Nasdaq pushed to an all-time high thanks to a surge in demand for tech stocks that are benefiting from lockdowns.

While an eventual deal is expected, a key drag for equities over recent weeks has been the stalemate on Capitol Hill over a new economic rescue package, with Democrats' $2 trillion proposal double the size of that put forward by Republicans -- and both sides refusing to budge.

However, House Speaker Nancy Pelosi provided a chink of hope by saying her party could be willing to make cuts to its offer in order to seal a deal, then return to thrash out other issues after November's elections.

"We're willing to cut our bill in half to meet the needs right now," she said. "We'll take it up again in January."

Bloomberg News reported that Treasury Secretary Steven Mnuchin and Senate Majority Leader Mitch McConnell said Pelosi's decision to remove $25 billion in funding for the Postal Service was an opening for talks.

That "could open the opportunity for discussion about something smaller than what the speaker and the Democratic Senate leader were insisting on at the point of impasse", McConnell said told the Louisville Courier Journal in his home state of Kentucky.

The two are at loggerheads over funding for the struggling post service, which is expected to see an exceptional number of mail-in ballots in November's election, with Donald Trump looking to limit them over claims of possible fraud.

The $3.5 trillion package agreed swiftly earlier this year, combined with a wall of cash and loose monetary policies from the Federal Reserve, have helped markets soar from their March troughs.

"We have a Federal Reserve that is all in, keeping rates low probably across the curve for as far as the eye can see," Katie Nixon, at Northern Trust Wealth Management, told Bloomberg TV. "That is supportive of higher valuations."

In early trade Tokyo was up 0.2 percent, while Sydney was up more than one percent and Seoul added 0.6 percent.

Taipei, Singapore and Jakarta were also in positive territory, though Shanghai retreated after a four-day run-up.

Wellington and Manila were also lower after recent big advances.

Nancy Pelosi
Nancy Pelosi's suggestion that Democrats could lower their stimulus proposal provided some hope US lawmakers can thrash out a deal Photo: AFP / JIM WATSON

Uncertainty over the stimulus, rising US infections and the Fed's massive bond-buying has, however, hurt the dollar, which is sitting around two-year lows against the euro, despite a surge in new virus cases there.

Sterling also briefly jumped back above its 2020 high against the greenback, having tumbled around 13 percent at the height of the pandemic panic.

Souring relations between China and the US remain on traders' radars, with the latest salvo out of Washington coming from a warning to colleges and universities to sell any Chinese holdings in their endowments owing to proposed fresh rules that could see the firms de-listed.

The warning comes with the superpowers locked in several standoffs ranging from Hong Kong, trade and the coronavirus, and US accusations of digital espionage.

Tokyo - Nikkei 225: UP 0.2 percent at 23,101.76 (break)

Shanghai - Composite: DOWN 0.6 percent at 3,431.32

Hong Kong - Hang Seng: Closed in morning

Euro/dollar: UP at $1.1934 from $1.1931 at 2100 GMT

Dollar/yen: UP at 105.50 yen from 105.40 yen

Pound/dollar: UP at $1.3239 from $1.3237

Euro/pound: UP at 90.14 pence from 90.11 pence

West Texas Intermediate: DOWN 0.4 percent at $42.71 per barrel

Brent North Sea crude: DOWN 0.6 percent at $45.19 per barrel

New York - Dow: DOWN 0.2 percent at 27,778.07 (close)

London - FTSE 100: DOWN 0.8 percent at 6,076.62 (close)

Copyright AFP. All rights reserved.