Asian shares and the dollar were higher on Thursday, but investors remained cautious as another shakeout on Wall Street and oil prices suggested volatility in financial markets will continue to temper risk appetite. The searing selloff in oil markets appeared to abate in the early Asian day, though data out of the United States underlined the fragile state of the global economy and investor confidence. MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.7 percent. Japan's Nikkei .N225 added 0.5 percent after plunging 3.7 percent in the previous session to a 14-1/2 month closing low. The dollar also bounced back from a one-year low notched against its perceived safe-haven Japanese counterpart. The greenback added about 0.3 percent to 117.25 yen after falling as low as 115.97, even as it marked impressive gains against some emerging market currencies.
Oil prices stabilised in early trading on Thursday after hitting fresh 2003 lows the session before, but analysts said a persistent global glut would keep pressuring markets. U.S. oil futures crashed below $27 dollars a barrel on Wednesday for the first time since 2003, caught in a broad slump across world financial markets as traders worried that a huge oversupply in crude was coinciding with an economic slowdown, especially in China. On Thursday, oil prices stabilised, with front-month West Texas Intermediate (WTI) crude futures CLc1 trading at $28.66 per barrel at 0155 GMT, up 31 cents from its previous close.
China stocks opened lower on Thursday, as the rout in global markets accelerates amid global economic growth and commodity price fears. But the Hong Kong market bounced off Wednesday's 3-1/2 year low, as the city's currency strengthened against the dollar on Thursday morning, while the offshore yuan, also known as CNH, also appeared to have stabilized. "Recently, buying in late afternoon trading session hints at the 'national team' at work, while the PBOC is determined to squeeze the CNH shorts," Hong Hao, managing director of research at BOCOM International wrote on Thursday.