Volatile Nikkei slips to 9500, recovers

The Nikkei was volatile Thursday after the index slumped 6.7 percent the previous day to 9610.10

TOKYO, Japan - - Tokyo's benchmark Nikkei 225 average dropped below the key 9500 level on Thursday morning, after initially opening higher.

Tokyo's market, which was delayed 30 minutes to 9.30am Japan time, opened more than half a percent higher, up 53.83 points at 9663.93.

But as the morning wore on, the Nikkei tumbled, extending Wednesday's 6.7 percent fall after the terrorist attacks in the U.S. shook investor confidence.

The Nikkei was down 1.28 percent or 122.69 points at 9487.41 mid-morning. That was the first time since December 1983 it had been below 9500. It later recovered to be back above 9600.

The broader capital-weighted TOPIX index fell 0.5 percent to 985.49 before climbing back to 993.43

Korea, Australia, NZ higher

Elsewhere in the region, markets in Australia, New Zealand and Korea opened higher Thursday after Wednesday's steep declines.

Taiwan and Malaysia, which were closed Wednesday, opened lower.

In Australia, the S&P/ASX200 was up about 1.4 percent after two hours of trade to 3150.9, with gains by telecoms giant Telstra, media group News Corp and miner BHP Billiton. Australian banks also recovered

The market had lost about 4 percent the previous day.

In Seoul, the Kospi rebounded sharply from its 12 percent plunge Wednesday. It opened about 2 percent up, and continued to climb, putting on 18 points to 493.69 as blue chips such as SK Telecom and Samsung Electronics made good gains.

Tokyo remains the focus

But Tokyo remains the focus for regional investors.

There are strong fears that the attacks in the U.S. could push the global economy into recession.

For blue-chip exporters such as Toyota Motor, Sony Corp and Nintendo, a chill in U.S. consumer confidence would be particularly damaging.

Consumer electronics maker Sony was off 3.38 percent at 4,570, extending Wednesday's 5.02 percent decline.

Toyota, Japan's biggest carmaker, lost 3.24 percent to 3,290 yen, while gamemaker Nintendo gave up 5.83 percent 15,820.

Tokyo traders initially reported their screens were a "sea of green" as prices momentarily recovered. But while Japanese bank stocks rose, the exporters soon weakened.

Air New Zealand wins government support

New Zealand was up about 1 percent in early trade, with Telecom NZ rebounding. But shares in troubled carrier Air New Zealand were suspended ahead of a recapitalisation plan to be unveiled later in the day.

Air New Zealand's money-losing subsidiary, Australian domestic carrier Ansett, was placed in voluntary administration late Wednesday after rival Qantas declined to take it over.

About midday, the New Zealand government announced it would allow Singapore Airlines to lift its stake in Air NZ from 25 percent to 35 percent, and also announced it would make a NZ$550 million credit facility available to Air NZ.

Another market under close scrutiny is Hong Kong, where the Hang Seng index slumped almost 10 percent Wednesday.

U.S. stock markets will remain closed at least until Friday.

Reuters contributed to this report.