UPDATE: Nikkei jumps as other Asian markets try to recover from Wednesday selloff

12/06/17 11:29 PM EST

By Ese Erheriene

Volatility expected to continue ahead of U.S., China job data

Asia stocks largely steadied Thursday after European and U.S. equities overnight showed scant reaction to big stock declines a day earlier in the region.

While more moderate than Wednesday, selling continued in China, South Korea and Taiwan. But Japan's Nikkei Stock Average rebounded, rising 1.2% after Wednesday's 2% decline, the most since March.

"We're seeing Asia markets find stability," said Jingyi Pan, a market strategist at IG Group. "Fundamentals haven't really changed, so investors will be looking for opportunities to buy."

But Pan said she expects market volatility to continue ahead of Friday's November readings on Chinese trade and U.S. jobs.

A softer yen gave exporter shares a lift, particularly tech stocks, with Nintendo (7974.TO) and Hitachi (HTHIY) advancing about 2%.

Still, the Nikkei, which is off 1.6% so far this week, is on track for its biggest weekly decline in three months.

Elsewhere, Australian stocks shrugged off a smaller-than-expected October trade surplus for the country.

The S&P/ASX 200 rose 0.6% as utilities stocks jumped 1.2% and the Australian dollar hit session lows following the report. The reading added to prospects the central bank might not raise interest rates next year; a rate-tightening environment cools sentiment for dividend plays like utilities.

Meanwhile, pollution controls in China, Australia's biggest trading partner, will crimp manufacturing activity and "restrain the demand for Australia's iron ore," while currency fluctuations hit services trade, said Capital Economics' Paul Dales. "It may only be a matter of months before the trade surplus turns into a deficit," he said.

In China, stocks extended their recent weakness Thursday, with major indexes in Shanghai and Shenzhen down.

Amid the softness in Chinese shares, the Hang Seng Index has fallen nearly 7% in two weeks, cooling one of the world's best-performing indexes. Hong Kong's benchmark stock index was flat midday as Chinese auto makers listed there continued their slide.

South Korea's Kospi fell 0.5% despite an uptick for index-heavyweight Samsung. Taiwan's Taiex was off 0.4% as its biggest stock, Taiwan Semiconductor (2330.TW) , dropped 1.3%. The two tech companies' downgrade by Morgan Stanley helped stoke the recent global selloff in tech stocks.

Away from stocks, bitcoin continued to surge, hitting $14,000 for the first time early Thursday, according to CoinDesk, after breaching the $12,000 mark for the first time a day earlier.

Oil futures rose 0.3% in Asia after a near-3% slide overnight in the U.S., following the jump in gasoline supplies last week. That raised questions about demand for the fuel, as well as the near-term need for oil.

-Ese Erheriene ; 415-439-6400; AskNewswires@dowjones.com

 

(END) Dow Jones Newswires

12-06-17 2329ET

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