Stocks in Hong Kong extended a selloff after their biggest fall in three years on Monday, with the benchmark falling 1.2%.
In Tokyo, the Nikkei 225 index recovered 264.47 points, or 1.3%, to 20,376.59
In Hong Kong, the Hang Seng Index dropped another 260.97 points, or 1%, after yesterday’s 800-point collapse, to 24,975.31.
A gauge of Chinese companies with Hong Kong listings, known as H-shares, was down 2.9%. The drop from its high in May briefly put the index in bear market territory, defined as a 20% fall.
Elsewhere, Asian markets mostly rose as investors appear hopeful that a resolution between Greece and its creditors is still within reach.
Australia’s main index staged its strongest one-day gain since mid-February, with falling oil expected to lower operating costs for energy-intensive commodity producers. The Reserve Bank of Australia kept benchmark interest rates on hold at 2.00%.
CHINA
In China, the CSI 300 moved down 70.53 points, or 1.8%, to 3,928.
Shanghai’s relatively softer decline follows guidance over the weekend for a rescue fund to invest in exchange-traded funds tracking blue-chip stocks as long as the index stays below a certain level.
Gainers, concentrated in the insurance, banking and infrastructure sectors, included China Life Insurance Co., Bank of China Ltd. and China Railway Construction Corp., all of which hit their daily trading limit after shares rose 10%.
China has rolled out a steady stream of measures to arrest the selling frenzy that knocked $2.4 trillion in value from China’s equities over the past three weeks. Despite the recent rout, Shanghai shares are up 81% over the past year, and 15% since January.
Shanghai recovered modestly Monday, which some investors and analysts attributed to heavy buying of blue-chip stocks by state-backed funds.
Yet Beijing’s moves to stabilize the stock market seem unlikely to produce a durable recovery, even if the market can rebound in the short term. Some experts remain wary of Chinese domestic shares, even though the selloff over the past month has made some shares cheaper.
Since last November, China cut interest rates four times and lowered the amount of reserves banks are required to hold three times.
The campaign for blue-chip buying looks set to continue. Chinese brokerage Haitong Securities Co. on Tuesday said it would boost the amount it invests in blue-chip exchange-traded funds by 15 billion yuan ($2.42 billion U.S.). The announcement follows an agreement over the weekend among 21 brokerages to invest in a stock-rescue fund
Meanwhile, China’s volatility is starting to spill into global markets, as Beijing’s moves to arrest stock selloffs have darkened the outlook for the world’s second-largest economy.
Oil prices tumbled nearly 8% Monday, their biggest single-day decline in more than three months, amid fresh fears about weaker demand from China, one of the world’s largest consumers of raw materials. The sharp falls moderated Tuesday, with Brent crude gaining 1.6% to $57.43 U.S.
In other markets
The Taiex index in Taiwan subtracted 5.8 points, or 0.1%, to 9,250.16
In Korea, the Kospi index skidded 13.64 points, or 0.7%, to 2,040.29
In Singapore, the Straits Times Index regained 7.99 points, or 0.2%, to 3,340.93
The NZX 50 added 26.55 points, or 0.5%, to 5,803.17
The ASX 200 Index reacquired 106.43 points, or 1.9%, to 5,581.42
