Asian stocks closed mixed after a volatile trading session Thursday as investors flitted between profit-taking and bargain-hunting. Japan finished 2 percent higher -- it was down almost 1 percent at one point -- but Australia closed lower for the ninth straight session.
Investors remained extremely cautious with regards to the state of the U.S. economy. Earnings gloom looms with the expectation that Merrill Lynch will announce a sizeable writedown in its quarterly earnings due out later today. Federal Reserve Chairman Ben Bernanke is set to testify before the U.S. Congress as well, amid unanimous expectations for a half percentage point cut in U.S. interest rates at the end of the month.
Japan's Nikkei 225 Average closed 2 percent higher in a highly volatile session that saw stocks swinging in and out of positive territory. Stocks gained ground for the first time in five sessions, with exporters such as Honda Motor gaining after the dollar recovered ground against the yen.
South Korea's KOSPI rebounded 1.1 percent, ending a five-day losing streak as institutional buying lifted chipmakers and
banks, offsetting hefty selling from a continued foreign investor flight. Hynix Semiconductor finished up a whopping 12.13 percent, lifted by an improving outlook for the memory chip market and demand from equity funds.
Continued jitters in global markets erased early gains Australia's S&P/ASX 200 Index, which ended weaker for the ninth consecutive day. Traders say a bounce is possible but the Australian market is unlikely to recover much without a rise in offshore markets. Major banks mostly rallied, with National Australia Bank closing higher, but Commonwealth Bank of Australia slid, weighing on the index.
China's Shanghai Composite Index tumbled more than 2.6 percent, led by financial shares, as monetary tightening and a break of the market's technical support sparked waves of selling. Institutions dumped stocks with dual listings in China and Hong Kong after the average premium of China's A shares over Hong Kong-listed H shares soared to a record 108 percent on Wednesday as the Hong Kong market plummeted.
Hong Kong blue chips ended 2.7 percent higher, despite early losses. Investors took cues from mainland stock markets, which have been climbing despite worries about a possible U.S. recession. But earlier, mainland-traded shares fell more than 3 percent, prompting investors to lock in gains in recent highfliers like property shares. China's decision to raise the proportion of deposits that banks must hold in reserve also played into the morning loss.
Singapore's Straits Times Index ended higher by 2.6 percent as investors ignored an unexpected decline in key export data and sought undervalued stocks to plough money into.