* Stocks appear to steady after Monday's losses, eye China
* Shanghai shares volatile early, keeping investors
guessing
* Brokerage Everbright surges in Shanghai debut
* Australian dollar recovers, U.S. dollar dips
By Kevin Plumberg
HONG KONG, Aug 18 (Reuters) - Asian stocks and the
Australian dollar edged higher on Tuesday but shares in
Shanghai were highly volatile, keeping nerves frayed about
whether another bout of profit taking would hit global markets.
The Shanghai composite index <> opened lower but soon
turned higher after suffering its biggest single-day drop in
nine months on Monday. Fears that China is slowly tightening
its easy money policies are haunting investors.
The drop in China's market had a domino effect on other
markets, spreading nervousness that rallying asset prices have
run ahead of economic fundamentals and weak earnings prospects.
U.S. markets posted their worst loss in seven weeks on
Monday, with profit taking also hitting commodities. []
"I think macroeconomic indicators in general suggest that
things are improving globally and there's no reason to be so
pessimistic, but there's not a lot we can do about market
sentiment as long as stocks keep on falling," said Noritsugu
Hirakawa, a strategist at Okasan Securities in Tokyo.
Japan's Nikkei share average <> edged up 0.3 percent
as dealers covered their bets against the market, benefiting a
mixture of technology and retail companies.
The MSCI index of Asia Pacific stocks traded outside Japan
<.MIAPJ0000PUS> rose 0.5 percent after tumbling 3.7 percent on
Monday, the biggest daily decline since March 30.
The Shanghai index <> was up 0.6 percent by
mid-morning, helping to pull Hong Kong's Hang Seng Index <>
out of the red. Profit taking has pulled the Shanghai index
down by around 18 percent in the last two weeks after it jumped
more than 90 percent since the start of the year.
But the IPO boom in China gained pace, with shares of China
brokerage Everbright Securities Co <601788.SS> rising as much
as 42 percent in their debut in Shanghai before slightly paring
early gains.
The Australian dollar, which has had a tight relationship
with equity markets, rose 0.5 percent to US$0.8250 <AUD=> after
minutes from the Reserve Bank of Australia meeting underscored
that policy would be tightened as a recovery took hold.
The U.S. dollar and the yen both retained broad gains on
uncertainty over the strength of a global economic recovery.
The dollar index <=USD> -- the dollar against a basket of
six currencies-- was up 0.38 percent, not far from a two-week
peak of 79.514 hit on Monday. On the yen, the dollar was
slightly weaker at 94.38 <JPY=>.
The euro rose 0.3 percent to $1.4113 <EUR=> after dropping
to a two-week low around $1.4045 on Monday.
U.S. crude oil futures also steadied, rising 50 cents to
$67.25 a barrel after falling to a two-week low on Monday.
(Additional reporting by Elaine Lies in TOKYO)
(Editing by Kim Coghill)
