Bargain Hunters Boost Hong Kong, Shanghai Markets

Hong Kong and mainland stock markets rose on Wednesday on bargain buying after tanking the previous day but investors remain nervous about a possible trade war between China and the United States.

The Hang Seng Index added 0.8 percent, to close at 29,696.

On the mainland, the benchmark Shanghai Composite Index edged up 0.3 percent, to 2,915 and the Shenzhen Composite Index rose 1.2 percent, to 1,612.

Most other Asian equities reflected a similar trend.

Tokyo ended 1.2 percent higher while Sydney gained by a similar percentage, Singapore added 0.7 percent and Seoul put on one percent. There were also gains in Wellington, Taipei and Bangkok.

"Markets are faring much better as investors' emotions have tempered, but in general, markets remain in wait-and-see mode," said Stephen Innes, head of Asia-Pacific trading at Oanda. "Clarity is power but given the lack thereof, it's a struggle to get back in the saddle as a sense of once bitten, twice shy continues to permeate.

"The spoils of trade war have attracted bargain-hunting but completely trusting the markets in the aftermath of yesterday's meltdown is bordering on too soon, too quick as sentiment remains very apprehensive."

The greenback clawed back early losses against the yen but analysts warn it is still likely to face further pressure as investors look to the Japanese unit as a point of safety in times of turmoil.

The euro faced more selling following dovish comments about monetary policy from European Central Bank boss Mario Draghi, while the pound was also down against the US dollar. (AFP)