HONG KONG - Asian markets were mostly lower Thursday after marathon talks over Greece's massive debt ended without firm agreement as China's annual inflation rate hit a three-month high.

Tokyo dipped 0.38 per cent, Sydney was down 0.40 per cent and Seoul lost 0.64 per cent in morning trade, after closing at a half-year high on Wednesday.

Hong Kong, which also reached a six-month high on Wednesday's Asian market rally, lost 0.51 per cent while Shanghai shares were flat, up 0.02 per cent.

Greek coalition leaders ended lengthy talks on austerity measures Wednesday, with one remaining point of disagreement - pensions cuts - keeping alive fears it may default, a result that would send shockwaves across the eurozone and beyond.

Agreement on new measures demanded by the European Union, the International Monetary Fund and the European Central Bank and on a debt writedown by banks would open the way for a second rescue package for Greece, and close a key chapter in the eurozone's debt crisis.

The money is vital to prevent Greece from defaulting on 14.5 billion euros (S$23.9 billion) worth of payments to bond holders, due next month, as the country struggles under a 350-billion euro debt mountain.

Investors are now awaiting meetings of the European Central Bank and Bank of England on Thursday, with the focus firmly on what stand they will take on further stimulus for slowing regional economies.

China said annual inflation hit 4.5 per cent in January, its highest level in three months, after slowing to 4.1 per cent in December as government efforts to curb bank lending and surging property prices took effect.

The rise was mainly attributed to the Lunar New Year holiday last month.

Retail spending typically soars during the festival, the most important celebration in the Chinese calendar, as consumers splash out on food, wine and gifts for family and friends.

"The CPI (inflation) numbers will have a negative effect on the market. Continued high inflation means policy will continue to be tighter than the market had expected," Chen Wei, an analyst at China Minzu Securities, told Dow Jones Newswires.

Before January, China's inflation had eased for five straight months after hitting a more than three-year high of 6.5 per cent in July and analysts said the downward trend would likely resume in February as the economy slowed.

On Wall Street, the Dow Jones Industrial Average edged up 0.04 per cent by the close Wednesday while the broad-based S&P 500 rose 0.22 per cent and the tech heavy Nasdaq Composite added 0.41 per cent.

The euro was under pressure in early Asian trade, hitting US$1.3215 against the dollar before gaining ground to change hands at US$1.3251 and 102.22 yen, from US$1.3260 and 102.14 yen in New York late Wednesday.

The dollar was at 77.13 yen, edging up from 77.03 yen in New York.

New York's main oil contract, West Texas Intermediate (WTI) light sweet crude for delivery in March, gained 22 cents to $98.93 a barrel and Brent North Sea crude for March was up 20 cents to $117.40 in morning trade.

Gold was at US$1,732.40 an ounce at 0350 GMT, little changed from New York on Wednesday.