Asian Stocks Recover from Cyprus Bailout Fears

Asian stocks rebounded in the morning, recovering from the massive slide after the unprecedented mandate on Cyprus' bailout package renewed concerns on the eurozone's recovery efforts.

Japan's Nikkei advanced 2 percent or 246.55 points to 12467.2 as the yen returned to its low levels. South Korea's KOSPI was down nearly 1 percent or 19.12 points to 1987.3. Australia's S&P/ASX 200 added 0.3 percent or 15.40 points to 5030.8.

In China, the Shanghai Composite Index rose 0.2 percent or 4.56 points to 2244.6. Hong Kong's Hang Seng gained 0.4 percent or 86.19 points to 22169.5

Wall Street had ended weaker earlier as the uncertainties over the Cyprus bailout prompted investors to book profits. US markets are now awaiting the Federal Reserve's two-day policy meet to know more about the central bank's reaction to the recent upturn in economic conditions.

Concerns eased slightly after the eurozone finance ministers, known as the Eurogroup, indicated that Cyprus may receive more flexibility on the one-off bank deposit levy integral to its new bailout package.

But the country will still have to come up with €5.8bn ($7.5bn; £5bn) from the levy, although it could avoid smaller investors.

Investors are now awaiting the Cypriot parliament's decision on the matter expected later in the day, after postponing it twice. Analysts have warned there remains a considerable chance that the lawmakers fail to reach an agreement.

"There is a strong chance that parliament will reject the bank levy in its current form," said analysts at IHS Global Insight.

"However, the current structure of the bank levy is likely to change in order to garner parliamentary support, though increasing the burden on depositors with assets exceeding €100,000 will not necessarily encourage MPs to support the bill due to the wider implications for the economy".

Japanese investor sentiments picked up after the yen resumed its downward spiral against the dollar. The greenback bounced back over the 95 yen mark during the day.

Major Movers

Exporters rebounded in Tokyo, with electronic majors Sony Corp and Konica Minolta Holdings gaining 4.9 and 4.6 percent respectively. Automobile major Mazda Motor Corp rose 4.2 percent while Fuji Heavy Industries traded 3.4 percent higher.

Electronic stocks traded higher in South Korea as well. Shares of the heavyweight Samsung Electronics gained 2.8 percent while those of LG Electronics added 1.6 percent.

Some of the major resource stocks gained in Hong Kong. Citic Pacific added 1.7 percent while China Petroleum and Chemical Corp rose 1.3 percent.