Asia markets were mostly higher on Wednesday after Wall Street surged overnight on a bounce in oil prices and positive earnings news, shrugging off the recent global rout, at least temporarily. China shares were volatile, erasing most early losses in late trade.
"Swinging from depressive slumps to manic rallies, markets remain volatile," Vishnu Varathan, an analyst at Mizuho Bank, said in a note Wednesday.
China's market is likely to remain the region's sticky wicket for hopes the long global rout will end. The Shanghai Composite ended down 0.50 percent, or 13.65 points, at 2,736.13 after tumbling as much as 4.10 percent earlier in the session. That followed the index's worst day on Tuesday since the suspension of the circuit breaker rule in early January, closing down 6.4 percent, hitting its lowest level since December 2014. The Shenzhen Composite dropped 0.83 percent, or 14.27 points, to 1,700.153 after trading down as much as 5.62 percent earlier in the session.
Amid concerns about slowing economic growth and depreciation of the yuan, shares on the mainland got an additional bit of bad news Wednesday: China's industrial profits fell 4.7 percent on-year in December, declining for a seventh month.
The Shanghai Composite is down more than 20 percent since its most recent high of 3,651.76 on December 22, leaving it in a "bear within a bear" market. The index is off more than 47 percent from its 52-week high of 5,166.35, set June 2015.
"Chinese markets look like they will continue to sell off until their last day of trading before Chinese New Year on February 5," Angus Nicholson, market analyst at spreadbettor IG, said in a note Wednesday. "There is a good chance that Chinese equities may find their cyclical bottom in the next week and half if the current pace of selloff continues." He expects the Shanghai Composite might eventually bottom around the 2300-2400 level.
But the rest of the region shrugged off the continuation of China's selloff. Hong Kong's Hang Seng Index tacked on 1.02 percent, or 191.65 points, to 19,052.45 after dropping 2.5 percent Tuesday.
Japan's Nikkei index climbed 2.72 percent, or 455.02 points, to end at 17,163.92 after closing down more than 2 percent on Tuesday. Across the Korean Strait, the Kospi tacked on 26.18 points, or 1.40 percent, to end at 1897.87.
Bucking the trend, Australia's shares ended lower, with the S&P ASX 200 shedding 1.20 percent, or 60.164 points, to 4946.40 after being closed Tuesday for the Australia Day holiday, missing a regional market sell-off.