LNG Liquefied Natural Gas Limited

By Chao Deng 

China shares hovered near bear-market territory in Friday morning trading, extending an early-year selloff.

The Shanghai Composite Index was last down 0.7% at 2987.21, trading just above its lows from last summer. Its current level is down nearly 20% from its Dec. 22 close. A bear market is defined as a 20% or more drop from a recent high.

The Hang Seng Index was off by 0.5%.

The energy sector in Australia gave up most of its early morning gains, with the S&P/ASX 200 roughly flat. Japan's Nikkei Stock Average rose slightly by 0.7%. South Korea's Kospi was up 0.1%.

Gaining oil prices overnight appeared to have encouraged some investors to buy up energy shares, which have taken a drubbing amid jitters about slowing global growth, with China at the center of those concerns.

Liquefied Natural Gas Ltd. was up 8.1% and Woodside Petroleum Ltd. gained 0.7%.

"We haven't necessarily hit the bottom," said Mohit Bajaj, managing director at brokerage WallachBeth Capital LLC. The energy sector has lost 8.7% and 10.8% in Australia and Hong Kong respectively year-to-date.

Overnight, oil producers to miners and biotechnology stocks, some of the most beaten-down corners of the market, carved out sharp gains in the U.S. The Dow Jones Industrial Average rose 1.4% and the S&P 500 rose 1.7%.

U.S.-traded oil futures gained overnight 2.4% to $31.20 a barrel. In Asia on Friday, Brent crude oil was down a bit, at $30.85 a barrel.

Early Friday, China's central bank set the yuan at 6.5637 to one U.S. dollar, marking the sixth straight session it has guided the currency roughly steady.

In the freely traded offshore market, yuan traded at 6.5984 to one U.S. dollar, roughly unchanged from the previous day, when it weakened by as much as 0.7%.

The gap between the values of the currency on two sides of the border had widened slightly Thursday, causing jitters about how China's central bank would direct the market going forward. A record gap last week as bets by traders pushed the offshore yuan lower had threatened Beijing's campaign to pitch the yuan as a stable currency with international stature, triggering turmoil across the globe.

China's central bank forced the gap to close earlier this week by buying the freely traded yuan offshore through state-owned banks, according to traders. It guided the onshore currency slightly stronger early Thursday at 6.5616 to one U.S. dollar.

The Japanese yen was roughly flat at Yen118 to one U.S. dollar. The local currency has gained 2% year-to-date, as turmoil in Chinese and global markets have sent investors in a rush for safety.

The Indonesian rupiah strengthened 0.7% to 13,810 to one U.S. dollar. The currency had fallen as much as 1% on Thursday after news of explosions in the Southeast Asian country's capital city of Jakarta, although it recovered slightly after suspected government intervention following a rate cut by the central bank.

The Hong Kong dollar, which is pegged to the U.S. dollar, traded at 7.7793 to one U.S. dollar, after recording its sharpest drop in more than a dozen years overnight to as weak as 7.7894.

Gold prices were up 0.4% to $1078 a troy ounce.

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

(END) Dow Jones Newswires

January 14, 2016 21:41 ET (02:41 GMT)

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