Chinese shares recover some losses in early trade

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Chinese shares bounced higher on Tuesday, recovering some of the previous session’s steep losses.

The Shanghai Composite index was up 0.8% at 3,042.57, while Hong Kong’s Hang Seng index gained 0.5% to 19,987.99 in early trading.

The mainland index had plunged another 5.3% on Monday after last week’s sell-off rattled global markets.

China’s central bank set the yuan guidance rate steady for the third day to stem currency devaluation fears.

It had been weakening the yuan last week to boost exports, which raised questions about how concerned the authorities were about the health of the Chinese economy.

It also sparked concerns of a currency war in the region, as other trade-dependent countries try to compete with China.

The daily reference rate was set at 6.5628 per dollar, little changed from 6.5626 on Monday.

Asia trades mixed

Trading in the rest of the region remained cautious.

“A lot of the long-term concerns around China have still not dissipated,” said Angus Nicholson, market analyst at trading firm IG in a note.

Japan’s benchmark Nikkei 225 index fell 1.5% to 17,435.12 – playing catch-up with global markets after being closed on Monday for a public holiday.

But Australia’s S&P/ASX 200 index rose 0.4% to 4,951.80 and South Korea’s Kospi index gained 0.3% to 1,899.99, taking the positive lead from Wall Street.

Meanwhile, shares in Sharp jumped nearly 8% after local media reported that a government-backed fund had offered to invest 200bn yen ($1.7bn; £1.2bn) to help bail out the struggling electronics maker.

Oil prices hovering near 12-year lows, sent shares in resources-linked shares lower.

Mining giants BHP Billiton and Rio Tinto shares were down another 0.7% and 1.8% respectively in Sydney.