Asian Markets Stage Late Rally, China Surges 5%

Asian markets staged a late rally Wednesday with Japan and South Korea closing in the black, as oil dipped for the fourth straight session, signaling lower costs for firms following a plan by top exporter Saudi Arabia to raise crude output.

Crude's near-40 percent surge so far this year has fueled fears of lower consumer demand and business investment around the world and confounded central bankers caught between sluggish global growth and rising inflation. Pointing to more inflationary pressures ahead, U.S. corn and soybean prices closed near record highs on Tuesday as flooding in the U.S. Midwest damaged U.S. crop prospects.

Tokyo's Nikkei 225 Average closed 0.7 percent higher, with investors flooding to specific sets of shares such as car battery makers as the market lacked
major pillars for gaining. NEC Electronics 15.6 percent after Goldman Sachs raised its rating to "buy" from "neutral", citing the possibility of the firm's earnings beating market forecasts on growth of advanced microchips used in TV sets and mobile handsets.

South Korea's KOSPI finished over 1 percent higher as shipbuilders and shipping firms rebounded from their recent steep falls, but losses by Hynix Semiconductor weighed on the index.

Australian shares climbed 0.4 percent, with gains in top miners such as BHP Billiton helping to offset weakness among banking stocks on concerns about the global economy. Investment firm Babcock & Brown continued to recover from last week's losses, jumping 16 percent.

Hong Kong shares pulled back from early declines to close 1.2 percent higher amid improved turnover, led by further gains in oil stocks and a Shanghai markets-led recovery in Chinese financials. Sinopec, the most heavily traded stock of the morning, surged over 5 percent, rising for the third straight day, on mounting speculation that China will raise prices of refined products in the near term. The stock has risen more than 12 percent this week amid falling crude oil prices.

Singapore's Straits Times Index moved back into positive territory, ending 0.4 percent higher, with banks such as DBS Group climbing higher.

China's Shanghai Composite Index jumped over 5 percent as it bounced from technical support and oil refining giant Sinopec soared on speculation that authorities might hike domestic fuel prices. Fund managers said there was no major, concrete news boosting the market, and noted that turnover remained modest. Many described the bounce as a technical rebound rather than the start of an extended recovery.