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Hong Kong - Asian markets rose on Thursday, 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 eurozone.
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 was up more than 4%, having slipped 0.45% soon after opening.
Tokyo recovered from losses of more than three percent to end 0.60% higher at 19 855.50.
Seoul added 0.58% 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 five percent - 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 Thursday 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.
However, Mark Mobius, chairman of Templeton Emerging Markets Group, said the latest announcement out of Beijing "suggests desperation" by the leadership.
"It actually creates more fear because it shows that they've lost control," he told Bloomberg News.
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.
Analysts said new restrictions on margin trading and concerns about the overvaluation of many stocks have forced mainland investors - mostly individual retail traders - to cash out.
"We're clearly in the middle of a market panic of some magnitude in China and unfortunately the regulator response has really been quite harmful so far," Michael Shaoul, chief executive officer at Marketfield Asset Management in New York, told Bloomberg TV.
On commodities markets the spot price of iron ore, a key export to China, took its biggest one-day hit ever overnight, falling 10% to $44.59 a tonne - its lowest since May 2009.
"The risk from Chinese equities markets is clearly impacting commodities markets," IG Markets strategist Evan Lucas said in a note. "The steel price in China is now cheaper per tonne than cabbage."
While copper jumped as the US dollar slipped, oil prices also eased although they recovered slightly on Thursday.
US benchmark West Texas Intermediate for August delivery was up 75 cents at $52.40 and Brent crude for August rose 61c to $57.66 a barrel in afternoon trade following recent sharp losses.
Gold fetched $1 162.39 compared with $1 155.39 late on Wednesday.
The recovery in markets bled through to currency trading.
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.
Dealers are also tracking events in Europe after Greece was given a Sunday deadline to come up with a bailout reform plan its creditors find acceptable or face ejection from the eurozone.
European leaders slapped the ultimatum on Athens after last weekend's referendum in which Greek voters rejected austerity-packed reforms in return for more cash.
They have warned the country's leadership that if it does not provide detailed measures, a contingency plan is in place to deal with its removal from the euro area.
European equities brushed off the huge losses in Asia to end higher on hopes for a resolution to the Greek crisis after Prime Minister Alexis Tsipras vowed to present "credible" reform plans.
"European equities (are) positive (which) suggests hope of progress before the weekend deadline," noted Mike van Dulken, head of research at Accendo Markets.
Frankfurt added 0.66%, Paris rose 0.75% and London was up 0.91%.
In foreign exchange trade Thursday the euro was at $1.1085 against $1.1074 in New York but well up from the levels below $1.1000 earlier Wednesday in Asia.
In other markets:
- Manila climbed 0.19% to 7 377.69.
SM Prime Holdings slipped 0.74% to 20.20 pesos, Ayala Land added 0.41% to 36.55 pesos, while Philippine Long Distance Telephone shed 0.36% to 2 770 pesos.
- Wellington fell 0.52% to 5 737.45.
Spark was down 0.18% at NZ$2.785 and Warehouse Group dropped 2.57% to NZ$2.65.
- Kuala Lumpur gained 0.34% to 1 701.54.
AirAsia went up 0.77% to 1.31 ringgit and Telekom Malaysia rose 0.60% to 6.67 ringgit while AMMB Holdings climbed 2.24% to 5.47 ringgit.
- Jakarta ended down 0.68% at 4 838.28.
Rice manufacturer Tiga Pilar Sejahtera Food gained 3.66% to 1 985 rupiah, while coal miner Bukit Asam dropped 5.63% to 7 125 rupiah.
- Bangkok rose 0.16% to 1 472.57
Kasikorn Bank added 0.83% to 183.00 baht while telecoms group True Corporation lost 0.87% to 11.40 baht.
- Singapore fell 0.54% to close at 3 267.4.
United Overseas Bank dropped 0.48% to end at Sg$22.82 and Singapore Telecom finished at Sg$4.26, down 1.62%.
- Mumbai fell 0.41% to end at 27 573.66 points.
Miner Vedanta Limited fell 4.86% to 139.00 rupees, while Bharat Heavy Electricals rose 3.59% to 264.35 rupees.
