The tepid display came despite more record finishes for the Dow and S&P 500 in New York fueled by forecast-beating US growth data and news that a key inflation gauge remained in line with the Federal Reserve's target.
Hong Kong soared more than eight percent and Shanghai more than five percent from Tuesday to Thursday on news that Alibaba's co-founders had bought huge stakes in the firm and pledges by Beijing to help shore up markets and introduce economic support measures.
A decision by the People's Bank of China to cut the amount of cash banks must keep in reserve, to boost lending, provided a further lift to confidence.
However, analysts warned the government needed to provide much more help in the right areas of the economy -- particularly the colossal property sector -- to revive confidence among investors.
And while upcoming meetings of the Communist Party are expected to see officials unveil more measures, the lack of any fresh announcements this week has taken the wind out of the rally.
Hong Kong dropped more than one percent as investors brushed off news that China will offer more bailout loans for its struggling real estate sector, with the first funds expected to become available in the coming days.
There were also losses in Tokyo, Wellington, Taipei, Bangkok and Jakarta. However, Shanghai extended its advance to a fourth day, and there were also gains in Singapore, Manila and Seoul.
London and Paris rose at the open, but Frankfurt fell.
The Fed's preferred gauge of inflation -- the personal consumption expenditures (PCE) index -- is due later Friday, with traders hoping it will provide an idea about the bank's plans for interest rates this year.
That comes after figures showing that the core PCE held steady at policymakers' two percent target in October-December, marking the second successive quarter at that level.
- 'Inflation victory lap' -
Also Thursday, figures showed the US economy expanded a much-better-than-expected 3.3 percent in the last three months of the year thanks to a strong jobs market and consumer spending.
The readings stoked optimism that the economy will not tip into recession, with the Fed on course for a soft landing.
"There are no recession concerns here, and to make matters even better, we don't see any accompanying blowout growth in prices that are used in the GDP calculation," Charles Hepworth of GAM Investments said.
"Stronger growth without inflation is what everyone wants."
SPI Asset Management's Stephen Innes added: "The Fed is nearly running an inflation victory lap, marked by two consecutive quarterly core inflation readings of 2%. It is an unambiguous positive inflection point for stock investors as it opens the door for first-half rate cuts."
He said it was "challenging to interpret the GDP release in any other way than a Goldilocks scenario", referring to a situation where the figures are neither too strong nor too weak.
Focus is now turning to the Fed's first policy meeting of the year, where it is expected to hold rates, though its statement and comments from boss Jerome Powell will be pored over for an idea about decision-makers' thinking.
Bloomberg said investors have fully priced in a cut in May, while a total of 140 basis points in reductions is expected by the end of December.
Michael Hewson of CMC Markets said the chances of a rate cut in March were slim, having been put at around 80 percent at the start of January.
"There is a danger that in cutting rates in March they drive market expectations of further cuts into overdrive, something they have been keen to push back on with recent commentary," he said in a note.
- Key figures around 0810 GMT -
Tokyo - Nikkei 225: DOWN 1.3 percent at 35,751.07 (close)
Hong Kong - Hang Seng Index: DOWN 1.6 percent at 15,952.23 (close)
Shanghai - Composite: UP 0.1 percent at 2,910.22 (close)
London - FTSE 100: UP 0.7 percent at 7,585.26
Dollar/yen: UP at 147.81 yen from 147.51 yen on Thursday
Euro/dollar: DOWN at $1.0816 from $1.0885
Euro/pound: DOWN at 85.31 pence from 85.53 pence
Pound/dollar: DOWN at $1.2678 from $1.2726
West Texas Intermediate: DOWN 0.8 percent at $76.78 per barrel
Brent North Sea Crude: DOWN 0.5 percent at $82.03 per barrel
New York - Dow: UP 0.6 percent at 38,049.13 (close)
dan/sn/smw
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