Chinese shares claw back earlier losses
The Shanghai Composite finished the day down 0.52% at 2,735.56 after falling more than 4% earlier in the day, despite strong performances on US and European stock markets. On Tuesday the benchmark index saw losses of more than 6%.
Most other markets in the region saw a slight recovery from the previous day's falls. Hong Kong's Hang Seng picked up the US sentiment and finished the day up 1% at 19,052.45 points.
Japan's Nikkei 225 rose by 2.7%, closing at 17,163.92 after shedding 2.4% on Tuesday. Shares in carmaker Toyota rose by 3.8% as December sales figures confirmed the company remained the world's biggest car-seller for the fourth straight year.
Media reports that it was exploring a partnership with fellow car manufacturer Suzuki were denied by both sides, but Suzuki saw its shares jump 11.4%.
Fellow carmaker Daihatsu saw its shares soar by 16.4% after Toyota said it was considering buying the rest of the minicar maker. Toyota already owns a majority stake in Daihatsu.
A sharp rise in oil during US trade had boosted investor sentiment in the US andEurope on hopes that both Opec and non-Opec producers may take action to tackle oversupply, after the oil cartel on Monday called for co-operation from oil producing nations outside the cartel.
But the price of Brent crude later lost most of its gains, closing 1.4% up at $30.92. "The positive sentiment stemmed from strong US corporate earnings and talk of Opec and Russia considering production cuts. We consider the likelihood of any agreement between these parties as extremely low," ANZ bank said in a note on Wednesday. Australian markets reopened on Wednesday after a national holiday and the ASX 200 finished the day 1.2% down at 4,946.40 points, tracking Tuesday's sell-off elsewhere in Asia.
The latest economic data from Australia showed consumer prices had edged up only modestly in the last quarter.
Core inflation slowed to the lower end of the central bank's target range, which could be an incentive for the central bank to cut interest rates further.
"As December quarter inflation was in line with RBA forecasts it is probably not low enough to bring on another rate cut from the RBA on its own," analyst Shane Oliver of AMP capital said in a note. "But with inflation running at the bottom of the 2-3% inflation target it leaves plenty of room for another rate cut and helps reinforce the RBA's easing bias." In South Korea, the benchmark Kospi index closed 1.3% higher at 1,896.14 points.