Asia markets mixed as Shanghai recovers

HONG KONG: Asian stock markets were mixed on Thursday as Shanghai revived after China's rate hike put the region on edge, while oil prices again rose due to worries about Egypt.

The Shanghai Composite Index ended the session up 1.59 percent, or 455.41 points, at 2,818.16, led by a surge among car makers after they reported strong January sales.

Sydney's S&P/ASX 200 ended up 0.19 percent, or 9.6 points, at 4,914.4, following upbeat employment data and ahead of results from miner Rio Tinto.

The Anglo-Australian miner reported after the market closed that annual profits nearly trebled last year to $14.3 billion on the back of soaring commodities prices and growth in emerging markets.

However Hong Kong's Hang Seng fell 1.97 percent, or 455.41 points, at 22,708.62. The index has lost five percent this week.

Tokyo's Nikkei closed 0.11 percent, or 12.18 points, lower at 10,605.65 as Japanese traders went into consolidation mode before a public holiday and after a weak lead from Wall Street.

In Tokyo Toyota stood out, with the car giant's shares surging after it revised its full-year earnings outlook upwards, the US government found no fault with electronic systems blamed for acceleration problems, and reports emerged of a planned joint venture in Russia's Far East.

China's latest move to rein in inflation with an interest rate hike on Tuesday continued to worry Hong Kong, as US Federal Reserve chief Ben Bernanke made rare criticism of the Beijing central bank's anti-inflationary strategy.

Steven Leung, sales director at UOB KayHian in Hong Kong, told Dow Jones Newswires that "inflationary pressures in China continue to unnerve investors and we don't expect any rebound in the local bourse to be significant."

Adding to market worries, a newspaper controlled by the Chinese central bank carried a prediction by a government economist that inflation could exceed five percent for the first two months of the year.

On Wednesday, Bernanke called China's interest rate hike a "surprising" way to tackle inflation, and urged Beijing to instead let its currency rise.

In rare criticism of another central bank's policies, he told a committee in the House of Representatives: "It would be both in our interest and in the Chinese interest for them to raise the value of their currency. And it would help them with their inflation problem."

US stocks closed mixed in listless trading Wednesday as investors shrugged off a comment by Bernanke that the US economic recovery appeared to have strengthened but unemployment remained high, as well as merger and acquisition activity in the stock exchange sector.

The Dow rose just 0.06 percent, the broader S&P 500 index fell 0.28 percent, while the tech-rich Nasdaq dropped 0.29 percent.

Oil prices were higher on persistent concerns over the crisis in Egypt, where the embattled government has warned of a military crackdown against protesters.

New York's main futures contract, light sweet crude for March, climbed 32 cents to $87.03 a barrel in afternoon trade.

The contract fell late Wednesday on rising US crude stockpiles, an indication of weak demand from the world's biggest oil-consuming nation.

Brent North Sea crude for delivery in March was up 27 cents at $102.09 a barrel on the IntercontinentalExchange (ICE) in London.

"We expect the market to continue to price in a supply-risk premium as geopolitical tensions rumble on near-term," Standard Chartered analysts said in a research note.

On foreign exchange markets, the dollar strengthened to 82.52 yen in Tokyo compared with 82.35 yen in New York late Wednesday.

The euro fetched $1.3698, down from $1.3727 in New York, and was flat at 113.03.

Gold ended at $1,360.50-$1,361.50 an ounce in Hong Kong, down from Wednesday's close of $1,364.00-$1,365.00.

In other markets:

Singapore tumbled 1.50 percent, or 47.17 points, to close at 3,103.39.

Singapore Telecom fell 1.3 percent to Sg$3.05, after reporting marginally higher third quarter earnings. Container shipping firm Neptune Orient Lines dropped 4.05 percent to Sg$2.13.

Seoul ended 1.81 percent, or 37.08 points, off at 2,008.50.

Taipei fell 1.89 percent, or 170.26 points, to 8,836.56.

Acer fell 3.18 percent to Tw$73.1 and TSMC was 2.44 percent lower at Tw$72.0.

Jakarta fell 1.28 percent, or 43.83 points, to 3.373.64.

Telkom shed 1.9 percent to 7,650 rupiah and Bank Central Asia lost 3.4 percent to 5,700 rupiah.

Kuala Lumpur closed down 2.09 percent, or 32.08 points, at 1,503.99.

Top lender Maybank shed 2.50 percent to 8.56 ringgit, plantation giant IOI Corp lost 3.80 percent to 5.56 and builder SP Setia gained 1.30 percent to 6.45.

Manila fell 2.73 percent, or 105.06 points, to 3,738.31, a five-month low, dragged by inflation concerns.

Aboitiz Equity fell 0.9 percent to 33.30 pesos, Philippine Long Distance Telephone Co. dropped 1.1 percent to 2,380 pesos and Metropolitan Bank and Trust Co. fell 5.3 percent to 57.75 pesos.

Wellington fell 0.61 percent, or 20.61 points, to 3,365.87.

Freight company Mainfreight fell 2.3 percent to NZ$8.20, Steel & Tube rose 5.3 percent to NZ$2.39 and Fletcher Building dropped 0.5 percent to NZ$8.11.

Bangkok fell 2.14 percent or 20.80 points to 949.09.

"Markets are worried about the inflation situation in China," said Kobsidthi Silpachai, head of market and economic research at Thailand's Kasikorn Bank.

"Another thing is that the situation in Tunisia and Egypt is a warning sign for investors to be careful when investing in emerging markets. It reminds us all that no investment is risk free."

Banpu lost 28.00 baht to 694.00, while PTT shed 10.00 baht to 320.00.

Mumbai ended 0.74 percent, or 129.72 points, lower at 17,463.04.

Shares in companies belonging to the Reliance Anil Dhirubhai Ambani Group rebounded after taking a hammering on Wednesday on rumours that India's top accounting body was looking into its financial affairs.

Investors wiped $2.6 billion off the value of shares in the group's six publicly traded companies. Bosses on Thursday described the rumours as "completely false and baseless".

Reliance Infrastructure led the gainers, jumping 9.45 percent to 585.25 rupees while Reliance Communications rose 1.79 percent to 96.55 rupees.