Nikkei average up

Japan's Nikkei average rose on Thursday, rebounding from the previous session's sharp fall, as a surge in Chinese stocks lifted sentiment in the region, countering concerns over the euro zone crisis after anti-austerity protests in Spain. China's Shanghai Composite jumped as much as 3.2 percent in the afternoon session with traders citing speculation that authorities will take steps to prop up the stock markets, which have been dragged down by concerns over a sharp slowdown in the world's second-largest economy.
An injection of 180 billion yuan ($28.56 billion) by the Chinese central bank to ease liquidity strains ahead of a week-long holiday also boosted sentiment there. The Nikkei ended 0.5 percent higher at 8,949.87 after sagging 2 percent on Wednesday as a mass of companies went ex-dividend. "We are hearing chatter that China's securities regulatory commission asked mutual funds to stabilise the market before (the Communist Party's congress) in October," a senior dealer at a foreign bank said.
Japanese firms with heavy exposure to China, Japan's biggest export market, gained from the bounce in the Chinese market. Construction machinery maker Komatsu Ltd rose 2.3 percent and industrial robot maker Fanuc Corp added 0.6 percent, after falling as much as 1.2 percent earlier in the day. But social gaming companies Gree Inc and DeNA Co Ltd slumped after the Nikkei newspaper said mobile operator NTT DoCoMo Inc planned to launch a competing social gaming network on mobile devices in November.
DeNA, the most-traded stock on the main board by turnover, sank 9.2 percent, while Gree plunged 12.3 percent and was the second most-traded stock. NTT DoCoMo added 0.3 percent. The broader Topix index added 0.4 percent to 745.59, with 1.63 billion shares changing hands, up from Wednesday's 1.46 billion but down from last week's average of 1.85 billion.
The market was moving in and out of positive territory earlier in the session as concerns over the situation in Spain tempered short-covering of some oversold shares. Violent protests in Madrid against expected austerity measures and talk of Catalonia's secession increased the pressure on Spanish Prime Minister Mariano Rajoy as he moves closer to requesting rescue funds.
"The ECB's plan to buy bonds was an excellent one but it will be completely meaningless if they don't carry it out," said Masayuki Doshida, senior market analyst at Rakuten Securities. The European Central Bank's announcement of its bond purchasing plan earlier in September was a boon for European stocks, with the STOXX Europe 600 index ahead of the Nikkei with a 1.7 percent gain on the month against the Nikkei's 1.2 percent. The Nikkei is down 0.6 percent for the quarter, which ends on Friday.
That is partly due to a persistently strong yen, which erodes exporters' revenues garnered abroad once repatriated and makes them less competitive. The yen was traded at 77.715 yen to the dollar on Thursday. A survey of 10 Japan-based fund managers showed they ramped up their bond allocations to a record high and chopped those for equities to a fresh 14-year low as they remained unconvinced a stimulus drive by the ECB, the US Federal Reserve and the Bank of Japan will counter a global slowdown. "Negative headlines from Europe seem to be driving daily sentiment more than fears than about the dispute with China," said Trevor Hill, head of Japanese equities at UBS Securities.