Asian markets fluctuate as traders weigh US rate outlook

HONG KONG - Asian stocks swung through the morning session on Tuesday as traders weighed the outlook for US interest rates ahead of the release of a key inflation reading.

Investors are also gearing up for the corporate earnings season, with some observers warning that profit expectations, which have helped push several markets to record highs, may have gone too far and disappointing reports could spark a pullback in equities.

While last week's Federal Reserve guidance pointed to three cuts before the end of the year, strong economic data and comments from some central bank officials have fuelled worries it could come up short.

The projections sparked a rally on markets and calmed traders spooked by the previous week's data showing consumer and wholesale prices rose more than estimated in February.

However, with the US economy still showing few signs of trouble and the labour market still strong investors are reticent, with the closely watched personal consumption expenditures (PCE) -- the Fed's preferred gauge -- the main focus.

Readings on economic growth, jobless claims and business sentiment are also up for release.

Mixed signals from Fed officials in recent days have done little to remove any uncertainty.

All three main indexes ended down on Wall Street as talk swirls that the recent rally may have been overdone.

Asia fluctuated, with Hong Kong, Singapore, Seoul and Taipei all rising but Tokyo, Shanghai, Sydney, Wellington, Manila and Jakarta in the red.