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Asian Markets Close Mostly Higher, Chinese Stocks Slump

CNBC.com
Tuesday, 11 Sep 2007 | 5:14 AM ET

Asian markets found their footing and reversed losses to close mostly higher Tuesday, but China suffered heavy losses. Energy stocks rose after a surge in oil prices. Japan and South Korea closed stronger after spending most of the morning in negative territory.

U.S. crude oil was within striking distance of the all-time high of $78.77 set on Aug.1 as OPEC prepared to meet on output policy and after attacks on crude and natural gas pipelines in U.S. supplier Mexico. Japan's INPEX Holdings climbed nearly 5%, China's CNOOC rallied almost 3% and Australia's oil and gas producer Woodside Petroleum edged higher.

Chinese shares were the worst performers in Asia following higher-than-expected inflation figures. The Shanghai Composite Index was 4.5% lower in modest trade.

The Nikkei 225Average finished up 0.71% in thin trade, buoyed by a recovery in property shares such as Sumitomo Realty & Development, but lingering credit worries limited gains. Banks such as Sumitomo Mitsui Financial Group also powered higher. The Nikkei had spent most of the morning in negative territory despite data showing Japan's core private-sector machinery orders rose a better-than-expected 17% in July from the previous month. This came a day after a report showing Japan's economy contracted more than expected in the second quarter.

South Korea's KOSPI ended 0.6% higher, recovering some of the prior session's slump, as steel makers rallied on plans by Hyundai Steel and Dongkuk Steel to raise prices for some products amid booming global demand.

Australia's S&P/ASX 200 Index finished 0.6% higher, led up by a recovery in top lender National Australia Bank and other financial firms, while energy firms rose on a surge in oil prices.

Singapore's Straits Times Index closed 1.4% higher. Shares of oil-related stocks such as Labroy Marine and Singapore Petroleum rose as oil prices rallied to near-record highs ahead of a policy-setting OPEC meeting on Tuesday. Other oil plays also rose, with the world's top two offshore oil rig builders Keppel Corp and SembCorp Marine.

Hong Kong stocks closed slightly lower, as near-record crude prices fueled oil shares, offsetting losses in Hong Kong Exchanges and Clearing a day after the bourse operator logged its best one-day gain. Shares in Hong Kong property developers gained on bets of a more aggressive rate cut by the U.S. central bank after last week's data showed the U.S. economy lost 4,000 jobs in August.