Portugal Colonial - Asian markets mixed as bargain-buying tempers fears over outlook

However, the dollar lost some of its momentum against its major peers on profit-taking, with the euro finding some support ahead of an expected European Central Bank interest rate hike and sterling lifted by the election of a new prime minister.

Russia's decision not to resume gas supplies to Europe -- in retaliation for sanctions over Ukraine -- sent shock waves through trading floors Monday as it ramped up expectations of a painful recession in major economies.

European bourses took the brunt of the selling, though they pared their earlier losses as commentators said the shutoff had been expected to come at some point.

With Wall Street closed for a holiday, Asia had few new catalysts to drive buying.

In early trade, markets fluctuated between gains and losses, with Hong Kong, Seoul and Wellington down, while Shanghai, Sydney, Singapore, Taipei and Jakarta edged up. Tokyo and Manila were flat.

"A lot of clients are asking, have we seen the bottom yet and are we going into a global recession?" Grace Tam, of BNP Paribas Wealth Management Hong Kong, told Bloomberg Television.

"We do think the risk of a global recession, especially next year, is actually quite high" and that the energy crisis "is not fully priced" into markets, she said.

The next key event for investors is the ECB rate decision Thursday, with some observers tipping a 75 basis point hike to bring down record-high inflation.

That is followed later in the month by the Federal Reserve's meeting, where policymakers will debate a similar move, which would be the third rise in a row.

However, while central banks are lifting borrowing costs to fight surging prices, they have little power over the cost of oil, a key driver of the rises.

And on Monday OPEC and other major producers announced a surprise cut in output, sending both main contracts rising. The move came after the crude market fell in recent months on demand fears caused by a possible recession.

"In absolute terms, the 100,000 barrels a day supply cut doesn't matter that much to global supply balances," said Noah Barrett of Janus Henderson Investors.

"However, in terms of signalling, the move is important as it indicates that OPEC+ is watching demand very closely and is trying to manage supply to keep a floor on oil prices."

Several countries including the United States had earlier called for a rise in production, which was followed by a small lift of 100,000 barrels.

"The modest increase we got a month ago is now gone, so OPEC+ is clearly sending a message that they are not bowing to external demands," said Barrett.

"We should expect continued volatility in oil prices, with global demand indicators driving price movements."

Brent and WTI were both down from Monday's levels.

- Key figures at around 0230 GMT -

Tokyo - Nikkei 225: FLAT at 17,624.96 (break)

Hong Kong - Hang Seng Index: DOWN 0.3 percent at 19177.54

Shanghai - Composite: UP 0.4 percent at 3213.31

Euro/dollar: UP at $0.9960 from $0.9921 on Monday

Dollar/yen: DOWN at 140.40 yen from 140.53 yen

Pound/dollar: UP at $1.1587 from $1.1507

Euro/pound: DOWN at 85.96 pence from 86.22 pence

West Texas Intermediate: DOWN 1.0 percent at $88.54 per barrel

Brent North Sea crude: DOWN 1.0 percent at $94.80 per barrel

New York - Dow: Closed for public holiday

London - FTSE 100: UP 0.1 percent at 7,287.43 (close)

M.Gameiro--PC