Markets in Asia came off session highs, but mostly traded higher Thursday, despite another selloff on Wall Street overnight, with the region showing a mild recovery after concerns over China and fresh lows for oil prices spurred a global rout.
"2016 should end much better than it has started off for investors, ultimately providing okay investment returns, but expect a continued volatile ride," Shane Oliver, head of investment strategy at AMP Capital, said in a note Thursday.
Japan's Nikkei 225 retraced some gains, but still traded up 0.21 percent, after losing 3.71 percent in Wednesday's session, falling into bear territory. The index closed down 21.33 percent from its 52-week high of 20,686.03 set in June 2015. Reuters, citing capital flows data in Japan, said foreign investors remained net sellers of Japanese stocks for the week ending on January 16, selling a net 358.3 billion yen worth of shares. The week before, they sold 746.4 billion yen.
According to reports, Bank of Japan Governor Haruhiko Kuroda said the central bank will stick to its 2 percent inflation target, adding Japan's economic fundamentals remain firm.
The Topix was down 0.16 percent.
South Korea's Kospi see-sawed between gains of 0.68 percent at market open and losses of 0.38 percent before trading up 0.19 percent.
Down Under, the ASX 200 traded up 0.66 percent, buoyed by gains in energy, materials, and financials sectors. Among Australia's so-called Big Four banks, NAB was the strongest performer, rising 0.64 percent.
Angus Nicholson, market strategist at spreadbetter IG, said in a morning note that the positive open for ASX was due to the overnight performance of banks.
"This seems partly due to Aussie bank ADRs staying relatively unscathed during the U.S. session, which may have something to do with the brutal over-2 percent loss they suffered yesterday," he wrote.
Large resources producers Rio Tinto and BHP Billiton were up 3.07 and 1.34 percent respectively.
Chinese markets opened Thursday's session mixed, with the main Shanghai composite and Shenzhen composite extending losses. At market open, the indexes were down 1.45 and 1.70 percent respectively before erasing losses to trade up 0.51 and 0.78 percent respectively.
Mainland brokerages and banks traded positive in the late-morning session, with Citic Securities up by 1.20 percent, Bank of China up 0.86 percent and China Construction Bank tacking gains of 0.98 percent.
Hong Kong's Hang Seng index saw a rebound of 1.29 percent at market open, after falling nearly 4 percent in the previous session. Since then, the index retraced some gains to trade up 0.31 percent. The Hong Kong dollar, pegged to the U.S. dollar, eased off multi-year lows to trade at 7.8096.
Before markets opened, the People's Bank of China (PBOC) set its yuan mid-point fix at 6.5585, keeping it relatively stable compared with previous fixes in the week.
Oil prices took further hits during U.S. trading hours, falling to fresh 2003 lows, after data from the American Petroleum Institute showed higher-than-expected build up of U.S. crude inventories.
In Asian trading hours, oil saw slight relief as West Texas Intermediate (WTI) futures for March delivery were up 0.67 percent at $28.53 a barrel, while globally traded Brent futures were up 0.93 percent at $28.14. During the U.S. session, WTI futures for February delivery slid to $26.55 and Brent futures, also for February delivery, fell to $27.87 a barrel.
Energy plays in Asia were mostly higher, with Santos gaining 4.23 percent, Japan's Inpex up by 1.41 percent and South Korea's SK Innovation higher by 5.12 percent in morning trade. Among Chinese oil stocks, Hong Kong-listed shares of CNOOC, Petrochina and Sinopec traded between 0.61 and 4.38 percent higher.
Elsewhere, Japanese export stocks were trading mostly higher, with Sony rebounding by 2.77 percent. The dollar-yen pair saw a slight bounce back to trade up 0.21 percent at 117.14. A weaker yen is a positive for exporters as it translates into higher revenues when converted back into the local currency.
Sharp shares surged by 14.05 percent after the Wall Street Journal reported that Taiwanese manufacturer Hon Hai Precision Industry, also known as Foxconn, has offered the electronics maker 625 billion yen ($5.3 billion) to take over the troubled company. Hon Hai shares were up 0.68 percent.
In South Korea, shares of Hyundai Merchant Marine surged 27.21 percent after reports said the company was considering the sale of its bulk shipping business to private equity firm Hahn & Company for about 600 billion won ($496.86 million).
Major indexes in the U.S. ended in the red, with the Dow Jones industrial average closing 249.28 points, or 1.56 percent, lower at 15,766.74. Earlier, the Dow fell by as much as 566 points.
S&P 500 closed down 22.00 points, or 1.17 percent, at 1,859.33, while the Nasdaq composite slipped 5.26 points, or 0.12 percent, to 4,471.69.
Klaus Baader, head of research for Asia at Societe Generale, told CNBC's "Squawk Box" the selloff in equity markets have been "absolutely savage."
"It has very much the feeling of capitulation. I think one of the main reasons why this is happening is there's just so much uncertainty out there. And the uncertainty I think, in particular, relates to China and to what's happening to the global currency construct, where is China's [foreign exchange] policy going. That's one of the things that's really unsettling markets," he said.
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