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Nikkei Hits 9-Half Month High, Seoul Shares Drop

Japanese stocks got a lift Thursday from the firmer close on Wall Street.

The Nikkei average rose for a fourth session to a 9-1/2-month high as solid earnings and global merger activity encouraged foreign investors to keep snapping up outperforming Japanese shares.

Inpex Corp and other oil-related stocks gained on rise in the oil price, while Honda Motor rose on a newspaper report the automaker was likely to buyback its own shares.

The Nikkei closed up 0.3 percent, or 30.98 points to 10,836.64.

The average has gained some 6 percent this year, making it the best-performing Asian market so far in 2011, while Asian stocks outside Japan are down around 2 percent on the year to date, largely due to inflation worries and anticipated further interest rate hikes in countries including China.

Seoul Shares Drop

The Korea Composite Stock Price Index (KOSPI) closed down 0.6 percent.

Banking issues underperformed after South Korea unveiled measures to provide cash support to troubled savings banks, and imposed a six-month suspension of operations on two banks hit by liquidity shortages.

Funding for the credit line was pulled from the state-run Korea Finance Corporation and major commercial banks Woori, Kookmin, Shinhan and Hana, according to a statement from the Financial Supervisory Commission (FSC).

Shares in KB Financial Group, a holding firm for Kookmin Bank, fell 2.3 percent. Shares in Hana Financial Group, parent group for Hana Bank, declined 1.8 percent.

Shipyards and construction stocks also fell.

Crude oil refiners retreated sharply for a second day as firms lowered prices of heating oil amid government pressure.

Shares in LG Chem advanced 3.5 percent following recent falls and on its robust earnings outlook for the year.

Australian stocks rose 0.2 percent, touching a new 10-month high on Thursday, driven by positive earnings from Qantas Airways and energy firm Santos, although some miners, banks and other heavyweight stocks declined.

Qantas rallied 5.4 percent its biggest one-day percentage gain in 21 months after it signalled a return to growth after a severe aviation downturn, posting a four-fold rise in first-half profits.

Other stocks declined though, with coal-to-retail conglomerate Wesfarmers slipping 0.3 percent after choppy trade as investors took the view its 33 percent rise in first-half earnings, reported earlier on Thursday, had already been priced into the stock.

Bank stocks were mixed after ratings agency Moody's put the sector on review for a possible downgrade. Westpac Banking down 0.2 percent while Commonwealth Bank was up 0.3 percent.

Austar United Communications rose 3.7 percent on six times its average turnover after NBN agreed to buy Austar's spectrum holdings for A$120 million, enabling NBN to roll out a high speed fixed-wireless service to rural and regional areas.

China Turns Higher

Shares in China staged a turnaround to close modestly higher higher. The Shanghai Composite was up 0.1 percent.

Property shares came under pressure after Beijing announced further rules to restrict speculative home buying.Under the new rules, only families with residence permits in Beijing will be allowed to buy a second home.

Shares of Poly Real Estate fell nearly 3 percent, while shares of YN Real Estate closed down nearly 4 percent.

Developers also declined in Hong Kong. But the Hang Seng Index gained. Heavyweight HSBC advanced 1.7 percent.

Shares of Lenovo , the world's number four PC brand, rose by over 4 percent to an over one-month high on Thursday after it reported October-December earnings that beat market expectations.

By 0633 GMT, Lenovo was up 4.4 percent to HK$4.97, its highest intraday level since January 7.

Earlier, the company posted a 25 percent rise in third-quarter net profit, its best result in more than two years, helped by a strengthening Chinese currency and lower component costs.

Southeast Asia Markets

Singapore shares fell as concerns about rising interest rates hurt property and bank stocks. But Keppel Corp and Neptune Orient Lines bucked the trend after both firms had positive news for investors.

Earlier Thursday, Singapore revised downward its GDP growth for 2010 and warned that inflation will be higher than previously forecast, raising expectations of further monetary policy tightening.

Malaysian markets traded higher. The KL Composite rising close to 0.3 percent. The PSE Composite in the Philippines was also higher.

India's Telecom Scandal

Indian markets were in choppy trade, after four straight sessions of gains.

Shares in billionaire Anil Ambani-led companies were under pressure early in the session following a widening corruption probe. However by mid-day, Reliance Communications and Reliance Infrastructure were advancing. Shares of Reliance Power pared back losses, off by 0.5 percent.

The FTSE CNBC 100 Index inched 0.7 percent higher.