Asian Markets Seesaw, Japan Falls But Australia Gains

Asian stocks were mixed Thursday in volatile trading with markets seesawing between the red and black. Japan closed weaker and Australia finished in the black though giving back some gains made earlier on in the session.

Oil rose above $116 a barrel in the Asian session, pushing up commodity prices broadly and stoking inflation fears as investors bailed out of shares in the financial sector and bought back resource-related stocks.

Japan's Nikkei 225 Average fell half a percent, hurt by real estate shares in the wake of Urban Corp.'s failure. Financial stocks also declined on rekindled fears over the U.S. financial sector. Mitsubishi UFJ Financial Group and Mizuho Financial both closed lower. Real estate counters such as Mitsui Fudosan got hammered after Japanese property developer Urban filed for court-led rehabilitation. Urban plunged 48 percent to a limit-low of 32 yen.

Seoul shares closed higher with heavy industry issues rebounding after their latest steep losses, while banks advanced led by Kookmin Bank, which rallied after announcing share buyback plans.

Australian shares advanced 0.6 percent, but came off early highs as falls in banks such as Macquarie Group on credit worries offset gains in heavyweight resource stocks such as BHP Billiton and Rio Tinto.

Hong Kong shares weaved in and out of negative territory, but closed lower by 0.5 percent, as sharp post-earnings slumps in Li & Fung and Hong Kong Exchanges & Clearing overshadowed a rally in commodity-linked stocks. Shares in U.S.-focused consumer goods sourcing firm Li & Fung plunged 7.6 percent after the company posted a lower-than-expected 18 percent growth in first-half net profit. Hong Kong Exchanges & Clearing, which reported a 6 percent dip in second-quarter earnings on Wednesday, fell 2.4 percent after warnings of more challenging times ahead.

Singapore's Straits Times Index pared back gains to close 0.2 percent higher with banks such as DBS Group falling into negative territory.

Chinese stocks ended 0.4 percent lower after initial gains as data on industrial production and money supply appeared to confirm that the economy was slowing. Banks were among major losers with Industrial & Commercial Bank of China, the biggest lender, falling.