Asia Stocks Stabilize After Early Plunge

Asia’s stock markets stabilized Tuesday after plunges early in the day as U.S. stock futures hinted that Wall Street will recover some of the losses suffered in the Dow’s sixth-worst decline in its 112-year history.

By late afternoon major Asian indexes had recovered from the morning’s tailspin, encouraged by China’s economic data and by Dow futures rising 307 points, or 2.9 percent, at 11,032 and broader S&P 500 futures rising 33.70 points, or 3 percent, to 1,145.50.

In Europe, Britain’s FTSE 100 was up 0.7 percent at 5,103. Germany’s DAX rose 1.5 percent at 6,009 and the CAC-40 in Paris jumped 2.1 percent at 3,191.

South Korea’s Kospi ended up down 3.6 percent to 1,801.35 after plunging nearly 10 percent in the morning. Hong Kong’s Hang Seng ended down 2.3 percent to close at 20,024.93 after falling 7 percent earlier. China’s mainland’s key indexes ended only slightly lower after a turbulent morning.

Japan’s Nikkei 225 stock average pulled back from a fall of more than 4 percent to close 1.7 percent lower at 8,944.48. That was still its lowest close since March 15, just days after the earthquake and tsunami.

Australia’s S&P/ASX 200 index rose 1.2 percent to 4,034.80.

The turmoil was brought on by the Dow’s 634.76-point loss Monday, the first day of trading after Standard & Poor’s downgraded U.S. sovereign credit rating. Investors are also weighed down by fears that Italy and Spain could join the roster of European nations staggering under heavy debt loads. Greece, Ireland and Portugal have already received EU bailouts.

The European Central Bank stepped in Monday and bought billions of euros worth of Spanish and Italian bonds, helping to lower yields for the moment.

Benchmark oil for September delivery traded at $79.47 on the New York Mercantile Exchange after falling to $75.71, its lowest since September 2010. The contract settled at $81.31 per barrel on the Nymex on Monday.