Asian Stocks Rally Following US Rebound

Hong Kong and Chinese stocks led gains, with the Hang Seng and Shanghai Composite indexes up 1.6% and 1.2% respectively, after the S&P 500 Index posted its biggest two-day advance in 18 months and the Cboe Volatility Index fell, according to Bloomberg.

However, while Japanese shares initially took part in the rally, the Topix index closed down 0.9%, after rising 1.1%. Meanwhile, the Nikkei Stock Average fell 0.7% as a stronger yen weighed on the shares of exporters.

Korea's Kospi index gained 0.7% and Australia's S&P/ASX 200 rose 0.6% as the MSCI Asia Pacific rallied 0.4% overall.

Update: FTSE wavers after US stocks enter correction territory

This followed gains in the US yesterday with the Dow Jones climbing 1.7% and the S&P 500 up 1.4%.

ETF Snapshot: Investors continue to pile into US large caps despite market sell-off

However, the yield on 10-year Treasuries reached a a new four-year high yesterday of 2.902%, as the US dollar came under pressure and investors worried about US consumer data, due to be released tomorrow (14 February).

Miles Eakers, chief market analyst at Centtrip, said "the climb in US Treasury yields last week has been cited as the catalyst for the recent market volatility spikes" with its gains reflecting concerns over inflation.