(Reuters)– Volatile global markets showed signs of a respite from the recent blood-letting on Tuesday, as bargain hunters helped Asian stocks off three-year lows hit on fears that China’s economy was risking a hard landing, with Chinese shares losing another 5 percent.
Japan’s Nikkei average went down 369.02 points to 18171.66, while the broader Topix shed 29.99 points to 1450.77 on Tuesday. Later, Japan’s Nikkei erased most of its early losses after an intial drop of 4.3 percent.
Seoul shares rebounded on Tuesday as Chinese shares cut losses early in the session and on easing geo-political risk after North and South Korea reached an agreement, propped up by exporters.
The Korea Composite Stock Price Index (KOSPI) rebounded 1.5 percent to 1,856.26 points as of 0228 GMT. It was poised to break a six-day losing streak. Gainers outnumbered losers by 4.3 to 1.
Australian shares bounced off a two-year trough on Tuesday as the banking sector led a stunning recovery, a day after the market suffered its biggest one-day drop in over six years.
The S&P/ASX 200 index climbed 2.4 percent, or 119.6 points, to 5,120.9 by 0205 GMT, having turned around from a session low of 4,928.3.
It skidded 4.1 percent on Monday as fears about slower Chinese growth sent stock markets across the globe into a tailspin.
Global share markets have been hit by worries that the Chinese economy, the most important engine for the world economy, was growing at a much slower pace than Beijing’s 7 percent target for 2015.
Investors are also unnerved by uncertainty over U.S. monetary policy. The Federal Reserve has said it plans to raise interest rates this year for the first time in almost a decade.
The heavy fall in share prices worldwide over the past week has sharply reduced expectations of a U.S. rate hike in September, but the outlook is far from clear.