Beware: Asian stocks bounce seen short-lived (Ian Chua)

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Tuesday's rebound in Asian stocks is likely to be short-lived. Analysts are calling it a technical bounce as bruised investors picked up shares that had been beaten down rather than a turning point.

By Ian Chua

HONG KONG, March 6 (Reuters) -- Is it safe to jump back into the market?

At your own risk, analysts say.

Tuesday's rebound in Asian stocks is likely to be short-lived. Analysts are calling it a technical bounce as bruised investors picked up shares that had been beaten down rather than a turning point.

Markets still remain in a correction phase amid a global market rout that has yet to run its course, meaning further weakness is likely.

"We probably do have more downside and what we're seeing now is a bounce from oversold conditions," said Sydney-based Shane Oliver, head of investment strategy at AMP Capital Investors, which managed more than US$81 billion in funds as at Dec. 31.

"The best approach is to buy into weakness, but I wouldn't put it all in now, I'd spread it out over the next few weeks... It is like trying to catch a falling knife, trying to get the bottom of a market is very hard," he said.

A market correction typically lasts four to six weeks and can take prices down 10 to 20 percent in total, said HSBC Asia Pacific strategist Garry Evans.

The current market pullback is only a week old and MSCI's measure of Asia Pacific stocks <.MSCIAP> as of Monday's close, was down just 7.1 percent from the record high set on Feb. 27.