Nikkei erases sharp losses as China stocks stem torrid slide
* Investors covered their short positions in late trade - traders * Volume highest since last November By Ayai Tomisawa TOKYO, July 9 (Reuters) - Japanese stocks ended up on Thursday, pulling back from 3-month lows in volatile trade as China's markets stemmed their rout after Beijing slapped curbs on selling in the latest of a flurry of emergency measures to avert a full-blown crisis. The Nikkei average rose 0.6 percent to 19,855.50 after falling as much as 3.2 percent to 19,115.20 in the morning. "A plunge in early trade freaked out most investors, but those who shorted earlier seemed to have covered their short positions after China stocks rose," said Eiji Kinouchi, chief technical analyst at Daiwa Securities. He said that investors had braced for a sharp drop in the Japanese market since Nikkei futures in Chicago plunged overnight. "The Japanese market guarantees liquidity. Global investors sold Japanese shares because they wanted to hedge against the potential losses from their China positions," Kinouchi said. China's stock markets have plunged roughly 30 percent over the last three weeks. But the sharp selloff abated after drastic measures were unveiled by the Chinese securities regulator that ban shareholders with large stakes in listed firms from selling. The broader Topix index fell 0.2 percent to 1,579.89 after diving as much as 3.6 percent to 1,526.09, its lowest since April 1. Trading was heavy, with 3.7 billion shares changing hands, the largest since last November. The JPX-Nikkei Index 400 dropped 1.0 percent to 14,272.95. (Additional reporting by Hideyuki Sano; Editing by Shri Navaratnam)
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