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Asia's markets were mixed Thursday, as Hong Kong and China rebounded from recent weakness, but a stronger yen weighed on exporters in Japan, dragging down the Nikkei.

The Shanghai Composite Index rose 57.84 points, or 1.7%, to 3471.74, after plunging 5.5% Wednesday, while Hong Kong's Hang Seng rebounded 202.53 points, or 0.8%, to 24,187. Hong Kong shares have experienced much smaller declines in general than their mainland-listed neighbors. In Japan, the Nikkei fell 166 points, or 1.3%, to 12,945.30.

"Despite the 45% fall from its peak, we believe upside for the domestic A-share market is capped by more potential earnings disappointments, in particular from the loss of investment returns, massive funding needs ... and continued sell-down pressure from previously locked-up shares," writes Lan Xue, China strategist for Citigroup in Hong Kong, in a research note.

China Watch: Turn Chaos Into Cash

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Even with the Hang Seng's rebound, traders in Hong Kong noted heavy selling beginning to take shape in the local market. In particular, foreign long-only hedge funds were using the day's spikes to unload positions in

China Life Insurance

(LFC) - Get China Life Insurance Company Limited American Depositary Shares Report


Ping An



Hang Lung Properties


, they said.


Hang Seng Index seems to have stalled here with the resistance set at 25,000, and support at 23,300. Shorts are starting to creep up again.

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Cathay Pacific


is a popular one," says Martin Marnick, a director at Helmsman Global Trading in Hong Kong.

China Life Insurance gained 1.9% to HK$29.55, and Ping An climbed 2.6% to HK$64.05. Hang Lung Properties eased 0.7%, to HK$29.50.

Commodity prices in Asia remained steady. Oil was selling for $110.98 a barrel, while gold was at $938.40 an ounce, in Singapore during the late afternoon.

Shares in


(PTR) - Get PetroChina Company Limited Report

dropped 1.8% to HK$10.08, and

Aluminum Corp. of China

(ACH) - Get Aluminum Corporation of China Limited American Depositary Shares Report

gained 0.8% to HK$13.06.

Sinopec Shanghai Petrochemical

(SHI) - Get SINOPEC Shangai Petrochemical Company Ltd. Report

rose 0.5% to HK$8.71, after falling more than 6% in the previous session.

In Hong Kong, gold miner

Zijin Mining


slipped 1.3% to HK$7.90, as short sellers hammered the stock on the open. Zijin has risen recently on speculation that it will raise up to $1.5 billion in a Shanghai A-share listing.

Airlines weakened on the renewed strength in commodities. Cathay Pacific fell 2.3% to HK$15.36, and

Air China


dipped 1.1% to HK$6.07.

In Japan, the yen rose to 101.03 vs. the dollar, from 101.85 previously.


(CAJ) - Get Canon Inc. American Depositary Shares Report

lost 1.1% to 4720 yen, and


(HMC) - Get Honda Motor Company Ltd. Report

fell 0.5% to 2850 yen.


(NTDOY) - Get Nintendo Co. Ltd ADR Report

bucked the trend, rising 1.8% to 55,400 yen, as the company launched Super Mario Kart for its Wii console in Japan. Nintendo was also rumored to be mulling a price cut for the console to coincide with the game's launch in the U.S. and in Europe.

In other news,

Takeda Pharmaceutical


, Japan's largest drugmaker, said it was buying

Millennium Pharmaceuticals

( MLNM) for $8.8 billion, or $25 a share. The deal represents a 53% mark-up over Wednesday's closing price. Analysts said that Takeda wants to acquire blood-cancer medication Velcade before the patent expires on its diabetes pill.

Other Asian markets were also mixed. The Taiwanese Taiex gained 1.9% to 8829.40, while South Korea's Kospi rose 0.6% to 1764.64. In India, the Bombay Sensitive Index fell 0.6% to 15,695.10.

Be sure to check out the Far East Portfolio at to find out which Indian and Chinese companies are making big moves and announcing major news.

Daniel M. Harrison is a business journalist specialising in European and emerging markets, in particular Asia. He has an MBA from BI, Norway and a blog at

. He lives in New York.