By Ese Erheriene 

Declines in Chinese and Hong Kong stocks resumed Thursday even as benchmarks in Japan and South Korea logged solid gains after Wednesday's regional decline.

Indexes in China were down 1% at the midday break. The had jumped earlier in the week, on talk of market and regulatory reform, which stemmed recent selling that saw the Shanghai Composite Index hit an 11-month low last week.

The benchmark is back near that level, and Chinese markets are poised to stay weak and volatile in the short-term "without major policies to boost the economy in China," said Castor Pang, head of research at Core Pacific-Yamaichi International.

Late Wednesday, China's State Council unveiled additional tax-relief policies intended to support high-tech companies, startups and small firms.

But Ivan Ip, a market strategist at UOB Kay Hian, said Thursday's market movement showed investors weren't interpreting the tax-relief policies as good news, and were instead concerned U.S.-China trade frictions might be spreading further into the tech sector.

Tech continues to underperform in Hong Kong. That sector has been hit by trade concerns fueled by the U.S. ban on sales of American products to major Chinese telecom-equipment firm ZTE.

Smartphone-component maker AAC Technologies is on pace for a record 12th straight decline: It was recently down 4% to hit a fresh 8-month low. Lens maker Sunny Optical skidded 7.5%, returning to levels last seen during early February's global stock slide.

Both are members of the Hang Seng Index, which fell 0.8% to erase the month-to-date's gain.

"Investors are worried that Huawei and ZTE are only the first of many to be involved in the Sino-U.S. trade conflicts," said Mr. Ip.

Earlier this week, 10-year Treasury yields pushed above 3% for the first time since January 2014 and the dollar's strong rebound the past two weeks has it near 2018's strongest level.

The currency move helped Japanese stocks Thursday, with the Nikkei up 0.6%, as it looks to set another two-month closing high.

The best performer was Korea's Kospi, up 1.3% as heavyweight Samsung Electronics rebounded. It rose 2.7% following the release of its complete first-quarter results, reporting its fourth consecutive quarter of record operating profits.

It said Thursday while it expects the memory business to remain strong this quarter, earnings elsewhere "will be a challenge" due to a weaker market for flexible displays and tougher competition in the high-end smartphone industry.

Additionally, South Korea's first-quarter GDP rose 2.8% from a year earlier.

While Indonesia's stock benchmark opened with near 2% declines--building on a 2.4% drop Wednesday, its biggest in 17 months--Asia-Pacific benchmarks elsewhere were little changed. Also, S&P 500 futures were recently up 0.2%.

For investors watching rising U.S. yields, the "gloom hand is overplayed, " Stephen Innes, senior trader with Oanda, said in a research note. He said U.S. equity investors are showing broader confidence as earnings reports have generally been upbeat out of America.

"All this should instill a definite sense of calm" even as "massive regional" outflows have occurred this week, he said.

In other markets, bitcoin's march toward $10,000 on Wednesday has been reversed, with the cryptocurrency recently around $8,900, according to CoinDesk.

Oil futures are up some 0.5% in Asia despite the dollar's gains and surprise increases seen last week in U.S. inventories.

Later in the global trading day, market participants will be watching the European Central Bank's policy statement. No change is expected.

James Glynn contributed to this article.

Write to Ese Erheriene at ese.erheriene@wsj.com

(END) Dow Jones Newswires

April 26, 2018 01:06 ET (05:06 GMT)