CTX Caltex Australia Limited

Asian shares stabilized early Tuesday as jitters about the high-yield bond market receded and oil prices recovered slightly, a reprieve from deep selling across the region a day earlier.

Australia's S&P/ASX 200 was up 0.2% with a gauge of the energy sector up 0.6%. South Korea's Kospi Index rose 0.1% and Japan's Nikkei Stock Average fell 0.5%.

Hong Kong's Hang Seng Index fell 0.3% and the Shanghai Composite Index slipped 0.1%.

"It all comes down to oil and we're due for a bit of a rally," said Chris Weston, market analyst at brokerage IG. Lower oil prices makes it difficult for indebted commodity firms to pay their obligations. As the oil selloff eases, that should relieve some of the pressure on high-yield bond market, he said.

U.S. oil prices rose 1.9% overnight to $36.31 a barrel. While prices still fell below $35 a barrel intraday, their lowest level since 2009, traders appeared to be cashing in on brief gains after six-straight sessions of losses.

A selloff in commodities, worries about the Federal Reserve raising interest rates for the first time in years and concerns about global credit markets have pressured the region's shares in recent days. The liquidation of New York-based high-yield bond fund Third Avenue Focused Credit Fund, sparked massive selling in New York on Friday and in Asia on Monday. Benchmarks in Australia and Japan fell in the previous five sessions.

Some analysts say the selling may be overdone, positioning markets for a bounce back once the Fed concludes its two-day meeting from Nov 15-16. The central bank is expected to raise interest rates from near zero, a move that could stoke volatility across financial markets as investors withdraw from riskier assets and move funds into the U.S. Still, analysts say the Fed is likely to signal that the pace of subsequent rates increases will be slow.

U.S. stocks rose overnight, as oil and gas producers gained.

In Australia, Beach Energy Ltd. rose 6.9%, Drillsearch Energy Ltd. was up 8.3% and Caltex Australia Ltd. is up 0.7%.

But utilities and materials shares were still down 0.1% and 0.3%.

Prices for Brent crude oil were last down 0.1% at $38.11 a barrel.

Gold prices were up 0.1% at $1,064.80 a troy ounce.

Write to Chao Deng at Chao.Deng@wsj.com

(END) Dow Jones Newswires

December 14, 2015 21:35 ET (02:35 GMT)

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