Asian markets jump with China rebound

HONG KONG: Asian markets rose yesterday, reversing heavy morning losses and tracking a surge in Shanghai after China announced new measures to staunch a mainland rout that has fuelled fears about the wider economy.

The gains come after regional shares took a hammering Wednesday as shell-shocked traders were buffeted by the crisis in China, which has wiped trillions off valuations, and fears about Greece’s future in the euro-zone.

Commodity prices were also sideswiped, with one analyst saying a tonne of iron ore was now cheaper in China than a tonne of cabbage.

Shanghai ended 5.76% higher, adding 202.14 points to 3,709.33 on a wildly volatile day. It had tumbled 3.40% at the open but soared as much as 6.38% in the afternoon -- a 10% swing.

In late trade Hong Kong ended up 3.73%, or 876.23 points, at 24,392.79.

Tokyo recovered from losses of more than 3% to end 0.60%, or 117.86 points, higher at 19,855.50.

Seoul added 0.58%, or 11.60 points, to 2,027.81 and Sydney was slightly higher, adding 1.50 points to 5,471.00 -- both indexes had fallen about 1.6% in the morning.

After a series of failed measures, China’s market regulator Wednesday barred “big” shareholders -- defined as those with stakes of more than 5% -- and executives of listed companies from selling their shares for the next six months.

“Investor confidence is recovering,” Zhang Gang, an analyst from Central China Securities, told AFP.

Police and security regulators also launched a joint probe yesterday into “vicious short-selling”, the official Xinhua news agency reported. Short-selling is the selling of stock that is not actually held, in anticipation of a future fall in prices.

Shanghai had risen more than 150% in the 12 months to its June 12 peak in a borrowing-fuelled frenzy enhanced by hopes for economy-boosting measures by the government. However, it has given up about 30% since then.

US benchmark West Texas Intermediate for August delivery was up 75 cents at $52.40 and Brent crude for August rose 61 cents to $57.66 a barrel in afternoon trade following recent sharp losses. Gold fetched $1,164.03 compared with $1,155.39 late Wednesday. The Japanese unit was changing hands at 121.38 to the dollar and 134.66 to the euro, weaker than the 120.71 and 133.68 in New York, although it is still stronger than the 122 and 135 range seen at the start on the week.