Asian markets were mostly weaker Tuesday after surging oil prices and worries that Bank of America would scrap a deal to buy mortgage firm Countrywide Financial hurt Wall Street.
U.S. financial firms fell on Monday after a brokerage said Bank of America, the number two U.S. bank, could walk away from buying Countrywide, the largest U.S. mortgage company. However, BOA said after the closing bell that it remained committed to acquiring Countrywide.
Cost-sensitive airline stocks such as Qantas and Korean Air slipped after oil jumped over $4 to a record high of $120.36 a barrel, although soaring oil prices lifted energy firms such as Australia's Woodside Petroleum.
Seoul shares closed 0.6 percent higher led by technology stocks. Hynix Semiconductor rose on its latest memory chip price increases while LG Display jumped on its upbeat earnings outlook. But banking shares weighed on the market following disappointing earnings from KookminBank and Shinhan Financial Group.
Australian shares ended 0.5 percent lower, dragged down by a weak financial sector after St George Bank missed market expectations for first-half profit and trimmed its full-year outlook. But gold miners benefited from stronger metal prices.
Hong Kong stocks pulled into positive territory, to end the session 0.4 percent higher. Shares of PetroChina, were downgraded by Goldman to "sell" from "buy" amid widening refining losses as crude oil prices remain near record highs.
Singapore's Straits Times Index closed 0.3 percent higher. Singapore Airlines shares fell 1.7 percent after Citigroup initiated coverage on the carrier with a "sell" investment rating. But chemical products maker Sunvic Chemical Holdings surged as much as 10 percent after its chief executive officer told local media that the firm is expecting a net profit of US$42.9 million this year.
China's Shanghai Composite Index fell 0.7 percent led by financials, as investors were worried economic data scheduled to be released next week could stall the market's two-week-old rebound.
Tokyo's Nikkei 225 Average is closed for a holiday. Japanese markets will resume trading Wednesday.