• Shares in Asia-Pacific were mixed on Friday.
• The Caixin/Markit manufacturing Purchasing Managers' Index for March came in at 48.1, the lowest since Feb. 2020.
• Sentiment at Japan's large manufacturers soured in the three months to March, the Bank of Japan's quarterly tankan business sentiment survey showed Friday. The headline index for large manufacturers' sentiment came in at plus 14, a decline from the previous quarter's reading of plus 17.

SINGAPORE — Shares in Asia-Pacific were mixed in the first trading day of the new quarter as a private survey showed Chinese manufacturing activity shrank in March.

Chinese tech stocks in Hong Kong saw sizable losses on Friday, with Alibaba falling 2.14% and Baidu plunging 4.45%. JD.com shed 2.14%. The Hang Seng Tech index declined 0.74% to 4,524.25.

Hong Kong's broader Hang Seng index recovered from earlier losses to close 0.19% higher at 22,039.55. Trading in a number of Hong Kong-listed companies, including Chinese real estate firms Kaisa Group and Sunac, was suspended after missing the deadline for reporting annual results.

In mainland China, the Shanghai composite rose 0.94% to end the trading day at 3,282.72 while the Shenzhen component climbed 0.905% to 12,227.93.

The Caixin/Markit manufacturing Purchasing Managers' Index for March came in at 48.1, below the 50-level that separates growth from contraction. That compared against the previous month's reading of 50.4. Friday's reading was also the lowest since February 2020.

Data released Thursday also showed Chinese factory activity shrinking in March, with the official manufacturing PMI coming in at 49.5, below February's reading of 50.2.

The data comes as China battles its most severe Covid-19 outbreak since the pandemic began.

"The contraction of the PMI clearly was because of the omicron outbreak. If you look at the high frequency indicators, up until the omicron outbreak they were actually improving and quite strong," Dan Fineman, co-head of Asia-Pacific equity strategy at Credit Suisse, told CNBC's "Street Signs Asia" on Friday.

Elsewhere in Asia-Pacific, the Nikkei 225 in Japan slipped 0.56% to close at 27,665.98 while the Topix index fell 0.11% to 1,944.27.

Sentiment at Japan's large manufacturers soured in the three months to March, according to the Bank of Japan's quarterly tankan business sentiment survey. The headline index for large manufacturers' sentiment came in at 14, a decline from the previous quarter's reading of 17.

In South Korea, the Kospi dipped 0.65% on the day to 2,739.85. Australia's S&P/ASX 200 declined fractionally, closing at 7,493.80.

Trading at the Colombo Stock Exchange in Sri Lanka was halted for the day after the benchmark S&P SL20 index dropped more than 10% from the previous close, hitting the circuit breaker threshold. That comes as Sri Lanka is in the throes of a financial and economic crisis.

MSCI's broadest index of Asia-Pacific shares outside Japan declined 0.09%.

Overnight stateside, the S&P 500 dropped about 1.57% to 4,530.41. The Dow Jones Industrial Average slipped 550.46 points, or 1.56%, to 34,678.35. The Nasdaq Composite declined 1.54% to 14,220.52.

The losses on Wall Street came as the 2-year and 10-year U.S. Treasury yields briefly inverted for the first time since 2019, a move that is seen as a potential warning signal of recession ahead. The 2-year and 10-year spread was last in negative territory before pandemic lockdowns sent the global economy into a steep recession in early 2020.

The yield on the 2-year Treasury note last sat at 2.3976%, while the 10-year yield was at 2.4244%.

"It's always a tricky business to assume that an inversion of the yield curve is … somehow a different signal this time than it was last time," Paul Christopher, head of global market strategy at Wells Fargo Investment Institute, told CNBC's "Squawk Box Asia" on Friday.

"We take it seriously. We do see some other indicators that are flashing red in the economy right now such as consumer sentiment and forward expectations," Christopher said.

Still, he said an inversion would be more significant if it persisted for at least a month.

Currencies and oil

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 98.5 following a recent bounce from levels below 98.

The Japanese yen traded at 122.73 per dollar, stronger than levels above 122 seen against the greenback yesterday. The Australian dollar changed hands at $0.7503, off levels around $0.747 seen yesterday.

Oil prices were lower in the afternoon of Asia trading hours, with international benchmark Brent crude futures dropping 0.4% to $104.29 per barrel. U.S. crude futures slipped 0.66% to $99.62 per barrel.