Some Asia shares rebound from China rate-hike drop

HONG KONG (MarketWatch) -- Some Asian markets rebounded from their early losses Wednesday, shrugging off Tuesday's surprise quarter-point Chinese rate hike and brushing aside fears of more rate actions in coming months. The rebound was particularly pronounced in China where the Shanghai Composite (CN:SHCOMP 3,004, +2.10, +0.07%)erased a more than 1% loss in the morning to trade 0.7% higher by midday at 3,021.98. The moves came as some analysts viewed the central bank's rate increase as a sign of confidence that the country's economic growth could be sustained despite the policy tightening. Chinese airline stocks rose on expectation of a further yuan appreciation versus the U.S. dollar, while banks outperformed on hopes the hike would improve their interest rate margins. Shares of Air China Ltd. (AIRYY 27.61, 0.00, 0.00%) (CN:601111 15.80, +0.28, +1.81%)rose 4% and Bank of China Ltd. (CN:601988 3.60, -0.01, -0.28%) (BACHY 14.83, +0.23, +1.58%)gained 0.3%. Other regional markets also pared losses or rebounded, with Taiwan's Taiex and South Korea's Kospi each rising 0.6%, while Hong Kong's Hang Seng Index(HK:HSI 23,557, -207.23, -0.87%) narrowed losses and was down 0.9%. Also cutting earlier losses, Japan's Nikkei Stock Average (JP:NI225 9,382, -157.85, -1.66%) was 1.5% lower after falling more than 2%, and Australia's S&P/ASX 200 (AU:XJO 4,625, -30.78, -0.66%) was down 0.9%.