[TOKYO] Most Asian stock markets steadied on Wednesday after sliding to 3-year lows but a weak outlook for commodities and persistent concerns about China's economy discouraged most buyers.
MSCI's broadest index of Asia-Pacific shares outside Japan was little changed in early trade after plumbing its lowest since June 2012 on Tuesday on fears that China's slowdown would curb its huge appetite for commodities and resources.
The index was on track for a 19 per cent loss for the quarter, its worst loss in four years. "Global equities are closing in on their worst quarter since 2011, with a number of factors fuelling fears in an already jittery market, including weak global growth, driven by deceleration in emerging markets, particularly China," strategists at Barclays wrote. "We recommend overweight positions in Japanese and European equities." South Korea's Kospi dropped 1 per cent while Australian shares gained 0.3 per cent.
Japan's Nikkei brushed aside an unexpected drop in the country's industrial output and gained 1.6 per cent. It was still poised for a 14 per cent drop over the quarter, its deepest since 2010.
Asian stocks took an early positive lead from Wall Street, which ended slightly higher overnight as the US bourses took a breather, with the latest round of China fears that gripped global markets petering out for the moment.
Investors also felt relief as shares of mining and trading giant Glencore gained more than 10 per cent overnight.
Hitting risk sentiment, Glencore shares fell to a record low at the start of the week on concerns over the company's ability to withstand a prolonged decline in prices of metals.
Benchmark three-month copper on the London Metal Exchange rose 0.1 per cent to US$4,970 a tonne, though the rise did not do much to move the metal away from a six-year low of US$4,855 hit in August.
Prices of other industrial metals like aluminium and zinc also halted their recent routs overnight.
Commodities and the global financial markets still face a major test of nerves on Thursday, when the closely-watched Chinese Purchasing Managers' Index (PMI) is likely to show the country's factory sector shrank for the second month in a row in September.
Commodity currencies languished while the US dollar stood tall. The Canadian dollar stood near an 11-year low of C$1.3463 per dollar struck overnight.
South Africa's rand managed to bounce modestly but was still in reach of a record low of 14.16 per dollar touched on Tuesday.
The greenback, meanwhile, stood little changed at 119.86 yen. The euro was steady at US$1.1253.