Asian shares edged lower on Thursday, weighed down by worries that a surge in oil prices could exacerbate inflation pressures in the region and cripple economic growth.
The FTSE CNBC Asia 100 Index , which measures markets across Asia, was down 1.5 percent.
The surge in oil could hurt major economies like Japan, the world's third largest. On Thursday, the Cabinet Office said Japanese gross domestic product shrank a revised 0.3 percentin the final quarter of 2010.
Analysts polled by Reuters expect Japan's economy to grow 0.5 percent in the current quarter on improved exports and factory output. The economy is seen likely to continue growing this year, but high oil prices pose a risk to the outlook.
Japan's Nikkei average fell to a five-week low, breaking below a key support level after an overnight rise in oil prices and uncertainty about the Middle East sparked futures selling. The benchmark Nikkei ended the day down 1.5 percent, or 155.12
points, at 10,434.38. The broader Topix index fell 1.4 percent to 930.84.
Chip-linked shares underperformed the overall market, hit by a weaker outlookfrom Texas Instruments. Tokyo Electron dropped 2.3 percent and Sumco declined 2.9 percent.
Osaka Securities Exchange jumped 6.9 percent. The bourse and the Tokyo Stock Exchange plan to start talks as early as this month about a possible business integration, a source familiar with the matter said on Thursday.
The Osaka exchange said in a statement that it could not confirm whether it was in merger talks with another exchange.
Seoul shares sagged dragged down by technology issues as futures and options expiry fueled market volatility, analysts said.
Samsung Electronics fell 2.7 percent, retreating for a fourth straight session, as concerns persisted that its earnings may disappoint on a delayed recovery in TV demand. Shares in Hynix Semiconductor also dropped over 2 percent.
Hana Financial Group retreated 0.9 percent after about 31 million new shares were newly listed on Thursday. The shares, which were sold at a discounted 42,800 won apiece, were part of the financing for Hana's $4.1 billion takeover of Korea Exchange Bank.
The move by the Bank of Korea to lift interest rates by a quarter percentage point to 3.00 percent, also weighed on the market.
The Korea Composite Stock Price Index (KOSPI) finished down 0.99 percent at 1,981.58 points.
Australian shares sank 1.4 percent to a three-month closing low, hurt by an unexpected fall in employment in February, as well as a double-whammy knock to heavyweight miners from lower copper prices and weaker-than-expected China imports.
Index heavyweight BHP Billiton fell 3 percent, the biggest one-day percentage fall for the stock in 7 months.
Rival Rio Tinto fell 2.4 percent after it raised its offer for Africa-focused coal miner Riversdale Mining to $3.9 billion in a final bid to woo key shareholders.
Top banks all fell, while refiner Caltex Australia dropped 6.1 percent, wiping out a chunk of its recent gains, and airline Virgin Blue lost 4.2 percent.
The benchmark S&P/ASX 200 index fell 68.1 points to 4,699.7, according to the latest data, its weakest close since Dec 6.
New Zealand's benchmark NZX 50 index fell 0.2 percent to 3,406.2 after the central bank slashed its benchmark interest rate 50 basis points to provide a boost to the economy after last month's earthquake devastated Christchurch, the nation's second biggest city.
In China, the Shanghai Composite closed lower by 1.5 percent, snapping a four-session winning streak. The index dragged lower by metal and coal miners as investors took profits following their recent rally.
Jiangxi Copper dropped 4 percent and Chalco fell 2.7 percent, while coal miner Yanzhou Coal slumped over 5 percent and China Shenhua lost 4 percent.
Over in Hong Kong, shares of Gome Electrical Appliance Holding, China's second-largest home appliance retailer by market value, rose 1.1 percent after it replaced chairman Chen Xiao. The stock outperforming the Hang Seng index's 0.8 percent decline .
Minsheng Bank shares fell over 3.8 percent after it announced plans to issue 10 billion yuan worth of subordinate bonds.
In Southeast Asia, markets tracked the losses seen elsewhere in the region. Singapore's STI and Malaysia's KL Composite slipped 0.6 percent and 0.4 percent, respectively.