source from：WSJ website
MARKETS  ASIA STOCKS
China Shares Flirt With Bear-Market Territory
China shares rise in choppy session; Nikkei falls to three-month lowBy CHAO DENG
Updated Jan. 14, 2016 3:05 a.m. ET
5 COMMENTS

China shares flirted with bear-market territory but regained their footing Thursday, in a volatile session that deepened losses across the region.

The Shanghai Composite Index rose 2% to 3007.65 after falling as much as 2.8% in earlier trading, when the benchmark breached its lows from last summer’s crash.

China’s main stock index also briefly fell more than 20% from its recent high on Dec. 22, putting the market dangerously near closing in bear market territory, before shares recovered in the afternoon.

Elsewhere in Asia, markets were down sharply following a broad selloff in stocks that accelerated overnight in the U.S.

Japan’s Nikkei Stock Average fell 2.7% as the yen strengthened earlier in the day.

Australia’s S&P/ASX 200 fell 1.6%, Hong Kong’s Hang Seng Index fell 0.6% and South Korea’s Kospi fell 0.9%.

China’s yuan fell sharply in early trade in the offshore market Thursday, cutting into some of the gains the currency made earlier this week when the Chinese central bank intervened to prop up its value. It fell as much as 0.7% to 6.6128 to one U.S. dollar Thursday in the offshore market even after the central bank set the rate at which it trades in the domestic market stronger against the U.S. dollar.

The moves in the freely traded offshore yuan highlight Beijing’s continued struggles to tame the currency and guide investor expectations on how far the yuan could fall. In recent weeks analysts have lowered their forecasts for where they think the yuan will trade against the U.S. dollar this year.

The gap between the offshore and onshore yuan is a sore point for Beijing as it seeks to promote the yuan as a stable currency with international stature.

“The [Chinese] currency is causing tension in the whole world,” said Stephen Ma, head of greater China at BMO Global Asset Management. “What we’re seeing now is the result of a lot of government intervention” from China.

Earlier, China’s central bank fixed the yuan at 6.5616 to one U.S. dollar, slightly stronger from the previous fix of 6.5630 on Wednesday.

The onshore yuan, which can trade 2% above or below the central bank’s daily guidance, was last at 6.5861, slightly weaker than 6.5756 the previous session.

The Japanese yen was last weakening by 0.3% against the dollar at ￥117.96. Still the currency was near its strongest levels in almost five months and has gained 2.5% this year, as investor rush to haven assets amid uncertainty about China. A stronger currency hurts Japanese exporters as their goods become less competitive overseas.

Last week, confusion about China’s currency policy, as the yuan weakened more than expected, triggered a global stock selloff, and raised questions about how authorities will address capital outflows. Rapidly diminishing foreign-exchange reserves signal the central bank is deploying its huge war chest to steady the yuan.

Meanwhile, analysts say the large-scale government buying that buoyed stocks this summer has all but evaporated, and that officials’ tactics are becoming subtler.

Since the summer, Chinese authorities have resorted to a range of measures to keep a grip on the stock market, from buying hundreds of billions of U.S. dollars in stocks to freezing trading altogether. They allowed firms to voluntarily suspend trading last July and froze new public listings.

Less than two full weeks into the year, officials have flip-flopped on their policies, first curbing a commitment to allow large shareholders to sell their stakes, before doing away with the very brakes that were meant to stem volatility.

Steep losses in a benchmark of blue-chip stocks tripped a new “circuit breaker” system twice in the first week it was launched. Authorities scrapped the mechanism last Thursday, after just four days in use.

“The circuit breaker was the most memorable blunder yet,” said Hao Hong, managing director at Bank of Communications Co. in Hong Kong.

While Chinese economic data from Wednesday offered some relief to investors, fears persist about the slowdown in China and its impact on global growth. China’s exports fell 1.4% in December in dollar terms from a year earlier, while imports last month fell 7.6%. Both figures exceeded expectations.

A broad selloff in stocks accelerated in the U.S. Wednesday, dragging the Dow Jones Industrial Average to its lowest level since late September. The Dow has declined 7.3% so far this year.

U.S. crude oil bounced around overnight in the U.S., but settled well below earlier levels after data showed inventories of crude oil and refined products hit record highs. U.S. crude oil settled 0.1% higher to $30.48 a barrel, while energy stocks fell 1.8%.

“The selling pressure in global share markets has intensified over the past week despite the delivery of some positive economic data in China and the U.S.,” wrote Matthew Sherwood, investment strategist at Perpetual in a morning note.

Brent oil prices rose 0.3% to 30.36 dollars a barrel.

Gold prices were last up 0.3% at 1,090.50 dollars.

—Anjani Trivedi and Kosaku Narioka contributed to this article.

Write to Chao Deng at Chao.Deng@wsj.com