Asia opens up, Nikkei gains 1.26 per cent, ASX up 1.55 per cent

Asia opens up, Nikkei gains 1.26 per cent, ASX up 1.55 per cent

Major Asian markets bounced in early trade, beating expectations of a lower open based on the futures trading, after another round of selling on Wall Street.

Japan's Nikkei 225 was up as much 1.26 per cent immediately after market open, before retracing some of the gains to trade 0.45 per cent higher.

The benchmark index lost 3.71 per cent on Wednesday's session and falling into bear territory, down 21.33 per cent from its 52-week high of 20,686.03 set in June 2015. The Topix was up by 0.18 per cent after an initial spike of 0.96 per cent.

South Korea's Kospi gained 0.68 per cent at market open before trimming to trade 0.18 per cent higher.

Down Under, the ASX 200 up by 1.55 per cent, buoyed by a 1.23 per cent early rise in the financials sector. The so-called Big Four banks - ANZ, Commonwealth Bank of Australia, NAB, and Westpac - all gained between 0.64 and 1.40 per cent. Angus Nicholson, market strategist at spreadbetter IG, said in a morning note that the positive open for ASX was due to overnight performances of banks .

"This seems partly due to Aussie bank ADRs staying relatively unscathed during the US session, which may have something to do with the brutal over [negative] 2 per cent loss they suffered yesterday," he wrote.

Oil prices took further hits during US trading hours, falling to levels not seen since 2003, after data from the American Petroleum Institute showed higher-than-expected build up of US crude inventories. The West Texas Intermediate (WTI) prices for February delivery settled down $1.91, or 6.71 per cent, at $26.55 a barrel. Earlier in the session, it dipped to an intraday low of $26.19, its weakest price since May 2003. Internationally traded Brent futures fell by 91 cents to $27.87 a barrel.

Major indexes in the US ended in the red with the Dow Jones industrial average closing 249.28 points, or 1.56 per cent, lower at 15,766.74. Earlier, the Dow fell by as much as 566 points. S&P 500 closed down 22.00 points, or 1.17 per cent, at 1,859.33 while the Nasdaq composite slipped 5.26 points, or 0.12 per cent, to 4,471.69.

Klaus Baader, head of research for Asia at Societe Generale, told CNBC's "Squawk Box" the sell-off in equity markets have been "absolutely savage."

"It has very much the feeling of capitulation. I think one of the main reasons why this is happening is there's just so much uncertainty out there. And the uncertainty I think, in particular, relates to China and to what's happening to the global currency construct, where is China's [foreign exchange] policy going. That's one of the things that's really unsettling markets," he said.

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