 "A man, holding a mobile phone, walks past an electronic stock quotation board outside a brokerage in Tokyo, Japan. Photo: Reuters")
Asian share markets struggled to stay positive on Tuesday as a semblance of calm returned to Chinese stocks, though more wild swings appeared likely given the uncertain global outlook for economic growth and interest rates.
After plunging almost 7% on Monday, the CSI300 index of the largest listed companies in Shanghai and Shenzhen eked out a 0.8% gain in choppy trade.
Shares in Shanghai veered either side of flat and were last up 0.4%.
Investors across the rest of Asia hoped for the best and nudged Japan's Nikkei up a slight 0.1%, following Monday's 3.1% dive.
MSCI's broadest index of Asia-Pacific shares outside Japan recouped early losses to be all but flat. E-Mini futures for the US S&P 500 also hinted at stabilisation with a rise of 0.2%.
An uneasy peace settled after the People's Bank of China injected a generous slug of liquidity into domestic markets to keep borrowing costs down.
The central bank also set the value of its yuan currency a little firmer than many had expected, countering concerns China was seeking an aggressive devaluation to aid exports.
China's securities regulator said it was studying rules to regulate share sales by major holders and senior executives in listed companies.
That might indirectly address concerns that the imminent end of a 6-month lockup on share sales by major institutional investors, or sale next Monday, would result in a massive institutional evacuation from stocks.
Get Used to Volatility
Yet the underlying problems had not gone away.
Surveys of manufacturers across the globe out on Monday had found activity anaemic at best, with China and the United states both surprising on the downside.
That was one reason both the S&P 500 and the Nasdaq suffered their worst starts to a year since 2001.
"The price action reminds investors that the world is more connected than ever; volatility is likely here to stay, and liquidity may suffer if investor uncertainty worsens," analysts at Citi said in a note.
"Global growth and geopolitical stability remain the main sources of concern."
Policymakers seemed to share the general sense of unease.
A South Korean finance ministry official on Tuesday said the government will take action to stabilise markets if needed.
Sweden on Monday gave its central bank chief formal powers to act immediately to weaken the crown and help push up inflation, a radical step among developed world institutions.
The European Central Bank was under pressure to do yet more after German inflation proved surprisingly weak in December, pushing down bond yields and slugging the euro.
The common currency was stuck at $1.0822 on Tuesday, having touched a one-month low around $1.0780. Against a basket of currencies, the dollar was a shade firmer at 98.890.
The dollar regained some poise on the yen to stand at 119.52, after skidding as low as 118.68 on Monday.
Oil prices edged up on Tuesday as investors pondered the long run implications of the rift between Saudi Arabia and Iran.
Brent was quoted 29 cents firmer at $37.51 a barrel, while US crude added 27 cents to $37.03.
