Asia stocks rise as China fall stemmed

TOKYO: Most Asian shares recouped early losses and rose today as battered Chinese markets rebounded, while the safe-haven yen was pushed off highs scaled against the dollar.

Europe appeared ready to keep marching to a different tune, with the mood more sanguine after Greece was given more time to hammer together a compromise on its debt.

Spreadbetters expected European bourses to extend gains, forecasting a modestly higher open for Britain's FTSE, Germany's DAX and France's CAC.

MSCI's broadest index of Asia-Pacific shares outside Japan, often held hostage to volatile Chinese stocks, was up 1.8% after falling as much as 0.9% early in the day. It had touched a 17-month low on Wednesday.

At 0510 GMT, China's CSI300 index was up 4.9% and the Shanghai Composite Index had gained 3.8%.

Both indexes started the day significantly lower but a slew of fresh measures drafted to stem the fall arrested their fall, at least for the time being.

China's securities regulator took the drastic step late on Wednesday of ordering shareholders with stakes of more than 5% from selling shares for the next six months, in a bid to halt a plunge in stock prices.

"The market sees some positive signs today, but it is far from calling it a victory for the rescuers as more than half of listed companies are not trading in the market," said Du Changchun, analyst at Northeast Securities in Shanghai.

The country's stock markets have plunged roughly 30% over the last three weeks, with a series of increasingly aggressive attempts by authorities so far merely denting the massive exodus from the once-booming market.

"A huge amount of wealth has been wiped out ... People are underestimating the damage to the real economy," said Michiro Naito, executive director of equity derivatives and quantitative strategies at JPMorgan in Tokyo.

Japan's Nikkei trimmed earlier losses and was last down 0.7% as Chinese stocks reversed their fall. Hong Kong's Hang Seng soared 4.3%. Australian shares climbed 0.4% and South Korea's Kospi gained 0.2%.

US shares slid sharply overnight on growing fears that nose-diving Chinese shares could destabilise the world's second largest economy.

The dollar gained 0.6% to 121.41 yen, putting distance between a seven-week low of 120.41 touched overnight when it suffered a bruising 1.5% fall against the safe-haven Japanese currency.

The dollar's overnight tumble against the yen helped the euro, which climbed to US$1.1082, pulling further away from a one-month trough of US$1.0916 plumbed on Tuesday.

The Australian dollar, often used in proxy China trades, gained 0.6% to US$0.7473.

Commodities, far from immune this week to the slide in global equities, also caught a breather. US crude advanced 1.6% to US$52.48 but has still shed nearly 8% so far this week.

Copper on the London Metal Exchange rose 0.9% to US$5,569 a tonne after hitting a six-year trough of US$5,240 a tonne on Wednesday.

A bounce by iron ore futures in China pointed towards a rebound later in the day for benchmark spot iron, which retreated to a decade-low US$45 a tonne overnight. - Reuters