Asian stocks finished mostly higher Thursday, though markets pared back gains as investors weighed central bank support for the financial sector against continued uncertainty about growth and the worry that loose monetary policy could fuel inflation further out.
The U.S. Federal Reserve, the European Central Bank and the Swiss central bank extended emergency lending facilities for investment banks on Wednesday and expanded other liquidity
programs to ease credit market strains.
News that U.S. securities regulators have extended through Aug. 12 an emergency rule aimed at curbing abusive short-selling in the stocks of Fannie Mae , Freddie Mac and 17 other major financial firms buoyed U.S. financial stocks overnight. Meanwhile, the U.S. dollar continued its recovery of the past 10 days on Wednesday, helped by the central banks' move and data showing a surprising increase in private-sector employment in July.
Crude oil soared to settle at $126.77 a barrel in New York trade Wednesday. Prices had jumped more than $5 a barrel, marking crude's biggest one-day rally since July 10, when prices ended $5.60 higher. Oil is currently trading below $127 in the Asian session.
Japan's Nikkei 225 Average closed just a hair higher, as gains in a group of defensive stocks such as drugmakers offset steep falls in Denso and other exporters amid growing concern about the slowing economy and health of corporate earnings. Nintendo plunged over 8 percent after the video game maker said its quarterly profit rose 31.5 percent on the runaway success of its Wii game console, but it kept its annual outlook well short of market expectations.
South Korea's KOSPI finished 1 percent higher led by tech issues such as Hynix Semiconductor, which rose after reporting aquarterly operating loss that came below market estimates. Steelmakers also rallied on strong earnings and a positive outlook from the industry leader.
Australian shares climbed 0.8 percent as gains in oil and metals prices lifted heavyweight resource firms such as BHP Billiton and Woodside Petroleum.
Hong Kong shares advanced about 0.2 percent as a sudden snap back in oil prices boosted shares in CNOOC and as HSBC continued its upward march following a rally it its U.S. peers. Shares in China's largest shipping firm, China COSCO, soared 5 percent on a JP Morgan valuation upgrade, and market speculation the company will be included in Hong Kong's benchmark Hang Seng Index.
Singapore's Straits Times Index moved higher with a mixed performance in blue chips.
China's Shanghai Composite Index fell more than 2 percent, led down by oil refiner Sinopec and property firms, in response to a rebound of global crude oil prices and the prospect of a Chinese economic slowdown in the second half of this year.