"It is the fear of the spread of turmoil to other Middle Eastern countries that is fuelling the further increase in prices," said Ong Yi Ling, investment analyst for Phillip Futures in Singapore. Resource firms such as Australia's BHP Billiton and Rio Tinto were particularly affected by the unrest in the Middle East, amid worries that oil price rises will hurt world economic growth and demand for raw materials. Markets were also nervous about Chinese inflation data due out Friday, lest it lead to further tightening measures by the Beijing authorities, and about expected protests in OPEC lynch pin Saudi Arabia on Friday. Also denting sentiment in Tokyo were revised figures showing that Japan's economy contracted more than previously thought in the fourth quarter of 2010. The economy contracted by 1.3 percent in the quarter compared to a year earlier, hit by the expiry of green car subsidies, a strengthening yen and a new tobacco tax. In Hong Kong, Jackson Wong, investment manager at Tanrich Securities, noted that the slippage on the local market was modest compared to rises earlier in the week.
"I think investors remain cautious ahead of the release of major economic data from China tomorrow," he told Dow Jones Newswires. US stocks were flat Wednesday as concerns about Libya and a lack of indicators provided little direction for traders. The Dow Jones Industrial Average dropped 0.01 percent, the S&P 500 index retreated 0.14 percent and the tech-rich Nasdaq shed 0.51 percent. The euro held firm against the dollar in Asia as investors awaited a meeting of European leaders to discuss a permanent rescue mechanism for debt-laden nations. The euro edged up to $1.3914 in Tokyo from $1.3906 in New York late on Wednesday. It firmed to 115.17 yen from 115.07. The dollar was at 82.76 yen, marginally up from 82.70 yen. Gold opened at $1,428.00-$1,429.00 an ounce in Hong Kong, slightly up from its Wednesday close of $1,426.00-$1,427.00.