* Shanghai up 1.6 pct, trade still volatile on low volumes
* MSCI Asia ex-Japan gains 1 pct on China rebound
* Aussie little changed, govt bonds retreat
By Eric Burroughs
HONG KONG, Aug 20 (Reuters) - Chinese shares clawed back up
on Thursday after a two-week sell-off, giving a boost to Asian
stock indexes and commodities, but many investors were nervous
that the Shanghai slide may have more room to run.
The benchmark Shanghai Composite Index <> was up 1.5
percent, helped by reports that the stock regulator had
approved new mutual funds this week to help underpin the market
that has slid nearly 20 percent since hitting a 14-month high
earlier in the month. []
But Chinese shares surrendered some gains after jumping
nearly 3 percent at one point, showing that the market remains
highly volatile.
The gains helped give a lift to other regional shares that
have been battered by sudden slumps in Shanghai this month.
Japan's Nikkei average <> was up 0.7 percent, while
the MSCI benchmark of Asia-Pacific shares outside Japan
<.MIAPJ0000PUS> gained 1 percent.
Shanghai's impact on global markets has surprised analysts
but has been taken by some as a worrying sign about the outlook
for the Chinese economy, which has been among the strongest to
power out of the worst global downturn in decades.
Patrick Bennett, Asia FX and rates strategist at Societe
Generale, said the fact that Chinese shares were having such a
big influence on other markets felt like "intellectual piracy",
but showed how edgy investors are on the global outlook.
"That such is occurring does tell us of the fragility of
risk sentiment," Bennett said in a note to clients.
Gains in higher-yielding currencies were limited on worries
that the volatile Chinese market, which is still up 55 percent
so far this year, was suffering a sharp bout of profit-taking
that would resume before long.
The Australian dollar was steady at $0.8295 <AUD=D4>
despite the broad gains in stocks after having taken a hit from
the sharp drop in Shanghai shares.
The U.S. dollar edged up after sliding the previous day.
The dollar index, a gauge of the greenback's performance
against six major currencies, was up 0.2 percent at 78.589
<.DXY>.
Oil prices dipped 21 cents a barrel to $72.21 <CLc1> after
having surged more than 4 percent on Wednesday on data showing
a sharp plunge in U.S. crude stockpiles, a jump that spilled
over into shares of energy companies and helped push the Dow
Jones industrial average up 0.7 percent. []
Shares of Japanese oil and gas field developer Inpex
<1605.T> were up 2.4 percent.
Safe-haven government bonds slipped as stocks attempted to
stage a recovery.
Japanese government bond futures <2JGBv1> dipped 0.08 point
to 138.79 after having pushed up to a five-month high in early
trade. The five-year JGB yield <JP5YTN=JBTC> edged up a basis
point to 0.6550 percent after touching a four-year low the
previous day.
(Editing by Kim Coghill)
