An index of Asian shares reversed course and rose on Thursday as a slide in battered Chinese stocks was stemmed, at least temporarily, while the safe-haven yen was nudged off highs scaled against the dollar.

MSCI's broadest index of Asia-Pacific shares outside Japan , often held hostage to volatile Chinese stocks, was down 0.9 per cent early in the day, but then was up 0.8 per cent. During Wednesday, it touched a 17-month low.

At 0253 GMT, China's CSI300 index was up 1.6 per cent and the Shanghai Composite Index had gained 0.6 per cent. Both indexes started the day significantly lower.

The country's stock markets have plunged roughly 30 per cent over the last three weeks, with a series of increasingly aggressive attempts by authorities so far having failed to stem the massive exodus from a once-booming market.

China's securities regulator took the drastic step late on Wednesday of ordering shareholders with stakes of more than 5 per cent from selling shares for the next six months, in a bid to halt a plunge in stock prices.

Also, Xinhua news agency reported that China's police will investigate potentially "malicious" short-selling of shares.

"Fundamentally, China is coming back to a point of attraction - the monstrous P/E ratios have come back to more realistic levels," Evan Lucas, market strategist at IG in Melbourne, wrote. "However, the bursting bubble means value is unlikely to factor into thinking in the interim. The repercussions haven't completely played out yet."

Japan's Nikkei trimmed earlier losses and was last down 0.7 per cent as Chinese stocks reversed their fall. Hong Kong's Hang Seng soared 2.9 per cent.

Australian shares lost 0.4 per cent and South Korea's Kospi fell 0.7 per cent.

US shares slid sharply overnight on growing fears that nose-diving Chinese shares could destabilise the world's second- largest economy and have global implications.

Some commentators held a cool view towards the turbulent Chinese equities.

"Even if the sell-off in Chinese mainland equities continues for a while, we doubt it will have a major adverse effect on China's economy. Accordingly, we see little risk that it would trigger a rout of other emerging equity markets, either in the near future or further down the road," David Rees, economist at Capital Economics, wrote in a note.

The dollar gained 0.4 per cent to 121.22 yen, putting distance between a seven-week low of 120.41 touched overnight when it suffered a bruising 1.5 per cent fall against the safe-haven Japanese currency.

The dollar's overnight tumble against the yen helped the euro, which climbed to $1.1077, pulling further away from a one-month trough of $1.0916 plumbed on Tuesday.

The Australian dollar, often used in proxy China trades, gained 0.5 per cent to $0.7464.

Commodities, far from immune this week to the slide in global equities, also caught a breather. U.S. crude nudged up 0.9 per cent to $52.13 but has still shed nearly nine per cent so far this week.

Copper on the London Metal Exchange rose 1.1 per cent to $5,578 a tonne after hitting a six-year trough of $5,240 a tonne on Wednesday.

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