Asian shares rose on Friday as Chinese shares edged back from the previous day’s dizzying plunge, though regional investors remained fearful that the world’s best performing equity market was at the beginning of a major correction.

Spreadbetters expected Britain’s FTSE, Germany’s DAX and France’s CAC to open higher, albeit modestly in light of persisting Greek debt woes.

Buoyed by China, Australia and South Korea, the MSCI’s broadest index of Asia-Pacific shares outside Japan climbed 0.5 per cent, but looked set to slip 1.5 per cent on the week. It has gained nearly 7 per cent so far this year.

Nikkei, Shanghai Composite Index

Japan’s Nikkei inched up to a 15-year high and was on track for an 11-day winning streak and a fifth straight month of gains amid hopes for better shareholder returns.

After swinging wildly in and out of the red, the Shanghai Composite Index was last up 0.5 per cent.

It dove nearly 7 per cent on Thursday, when investors dumped stocks after more brokers tightened margin trading requirements and the central bank drained money to reduce flush liquidity in the financial system. The index still stands on top of an eye-watering 43 per cent gain so far this year.

“The correction is not yet over,’’ said David Dai, Shanghai-based investment director at Nanhai Fund Management Co Ltd.

“Yesterday’s slump was too rapid, so many investors didn’t have time to flee. Many are still seeking an exit. The market has risen too much, and too fast, so the confluence of bad news is causing panic selling.’’

Other commentators pointed to the strains of shares soaring despite a slowing economy.

“With valuations divorced from economic fundamentals, the heightened volatility we have seen is likely to continue,’’ economists at Capital Economics wrote.

Greece debt talks

Investors took a cautiously positive view on the euro as Greek debt talks grind on. The single currency was up 0.1 per cent at $1.0957 after pulling away from a one-month low of $1.0819.

Greece’s government intends to reach an agreement with its lenders on a cash-for-reforms deal by Sunday, its spokesman had said on Thursday, brushing off comments from euro zone officials suggesting a deal was far from imminent.

Dollar vs yen

The dollar retreated against the yen, fetching 123.73 yen after scaling 124.46 overnight, its highest since 2002. The greenback was knocked off the peak as Japanese government officials used stronger language to describe recent moves, with Finance Minister Taro Aso saying the yen’s recent drop had been “rough’’.

The dollar index was little changed at 96.912, pulling back from a one-month high of 97.775 struck on Wednesday.

Crude oil

In commodities crude oil extended gains after rebounding overnight thanks to data showing a fourth weekly drawdown in US crude stocks.

US crude was up 63 cents at $58.31 a barrel and Brent gained 54 cents to $63.12.

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