Asian markets rebounded Tuesday from the previous session's dip, as bargain hunters scoured the market after five days of losses. Both Japan and South Korea finished over 1 percent higher.
The U.S. dollar slipped back toward one-month lows against major currencies, putting upward pressure on the cost of crude, which has already risen about 20 percent in May to record highs above $130 barrel.
Resource-related shares such as Japan's Inpex Holdings and Australia's Santos closed higher after crude oil prices rose above $133 as long-term supply concerns lingered and fresh production problems appeared in Nigeria and Norway. But the high cost of oil is raising worries that rising prices will hamper U.S. economic growth and dent consumer spending in Asia's largest export market.
Tokyo's Nikkei 225 Average rose 1.5 percent, rebounding sharply from a two-week closing low hit the previous day, with stocks that had fallen sharply such as Canon and banks regaining ground. Major paper firms surged, with Mitsubishi Paper Mills jumping 9.1 percent a day after Mitsubishi UFJ Securities raised its rating on paper mills, saying printing paper price hikes should drive up their earnings.
South Korea's KOSPI closed over 1 percent higher after six consecutive losing sessions, with crude refiners and technology firms such as SK Energy and Samsung Electronics leading the rebound.
Australian shares edged up 0.1 percent, with barley exporter ABB Grain touching a record on upbeat earnings and outlook, though fund manager Perpetual fell on a profit warning.
Hong Kong stocks rose 0.6 percent, tracking firmer regional markets, with Sun Hung Kai Properties gaining after its board of directors ousted chairman Walter Kwok, replacing him with his mother. China BlueChemical, an affiliate of CNOOC, surged over 6 percent after the country's top producer of nitrogen fertilizers told Reuters it planned to nearly triple its production capacity by 2011 through growth and acquisitions. CNOOC, China's top offshore oil and gas producer, rose 3.7 percent.
Singapore's Straits Times Index edged 0.4 percent higher with banks such as UOB and DBS Group rebounding from the previous session's losses.
Chinese stocks were mixed following Monday's 3.13 percent slump, as financials rebounded while oil firms continued sliding on concern that high global crude oil prices would widen their refining losses. The Shanghai Composite Index ended 0.3 percent higher, but banks were firm and brokerages surged on hopes that regulators would take new steps to support share prices and ensure market stability before the Beijing Olympics in August. CITIC Securities the biggest listed brokerage, rose over 3 percent. Haitong Securities surged almost 8 percent, after tumbling 19 percent over the previous two days on news that Minsheng Bank was attracting little interest in its planned sale of a small stake in the brokerage.