Asia's stock markets snapped their longest losing streak since February on Thursday and rose following a bounce on Wall Street, though subdued trade in currency, commodity and bond markets suggested investors remain cautious about the outlook.

MSCI's broadest index of Asia-Pacific shares outside Japan gained half a per cent, lifting away from a one-month low made on Wednesday.

Japan's Nikkei rose 0.5 per cent and markets in Shanghai and Hong Kong opened higher. But pressure returned to the oil price on worries about soft demand, a harbinger of weaker global growth.

An overnight rally in riskier currencies also paused, as foreign exchange traders look for the European Central Bank's tone at its meeting later on Thursday to guide the next move for the euro, dollar and the broader market.

S&P 500 futures and Nasdaq 100 futures each fell 0.4 per cent in Asia.

Indonesia's main stock index dropped 4 per cent to its lowest in more than a month on news the country's capital Jakarta will reinstate social distancing restrictions due to a rise in coronavirus infections.

“The price action suggests that strong buying interest remains on market corrections given the backdrop of ample central bank liquidity,” economists Liz Kendall and Brian Martin at ANZ Bank said in a note.

“However, with some volatility having returned to markets it's too soon to say whether the rout is over, or whether last night's recovery is simply a pause,” the added.

Overnight on Wall Street the tech-heavy Nasdaq posted its steepest rise in more than four months, gaining 2.7 per cent, to halt a three-session selldown that whacked tech stocks.

Stay-at-home companies such as Facebook Inc and Google-parent Alphabet Inc climbed, while electric-car maker Tesla Inc rebounded nearly 11 per cent, a day after suffering its biggest ever percentage drop.

The Dow rose 1.6 per cent and the S&P 500 2 per cent and bonds sold off in concert with the rally. The yield on benchmark 10-year US government debt rose about 2 basis points to 0.71 per cent overnight, with soft demand at a $35 billion auction.

That retraced a little bit to sit at 0.6951 per cent in Asia.

MARKET DISLOCATION

The rebound in equities has steadied a sharp selloff that has highlighted the fragility of a rally that has carried the Nasdaq up 70 per cent from March lows.

“It's a double-edged sword,” said Oriano Lizza, sales trader at CMC Markets in Singapore, as retail investors who had great success on the way up now facing a tougher environment.”

“This is where there's a lot of trepidation,” he said. “The market structure is dislocated at the moment... with stimulus and (markets at) all time highs - there's no reference point.”

The ECB policy decision at 1145 GMT, followed by a news conference from President Christine Lagarde at 1230 GMT, is the next focus for investors.

Earlier in the week worries that the bank is concerned at the euro's recent rise had the euro under pressure.

However, hopes for an improving economic outlook, following a Bloomberg News report that ECB economic projections would be broadly steady since June, had the euro on the front foot in Asia at $1.1817.

“The risk now is that the euro could lift after the ECB meeting, if that is the case and there is more confidence,” said Commonwealth Bank of Australia currency analyst Kim Mundy, something that would pull other currencies higher on the dollar.

Elsewhere oil prices paring some overnight gains on worries about fuel demand after data showed US crude stockpiles rose last week, rather than dropping as expected.

Brent crude futures fell 0.4 per cent to $40.63 a barrel and US crude futures fell 0.6 per cent to $37.82 a barrel. Gold was steady at $1,943 an ounce.

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