HONG KONG - Asian stocks closed mixed Wednesday as Japan rallied on surprisingly strong economic growth data, but worries about inflation and a share price slump at the start of the week lingered.
Japan's stock market rose more than one percent after official data showed the country's economy had powered ahead at a 4.0 percent annualized pace in the first quarter of 2008.
However, analysts warned tougher times lay ahead due to high oil prices and slowing US growth. Investors elsewhere in Asia are worried that soaring oil prices will stoke inflation, leading eventually to slower economic growth.
Meanwhile, Chinese shares closed at their lowest level since March 2007, dropping 1.57 percent after a plunge of nearly eight percent Tuesday.
A Chinese central bank move to tighten credit conditions to cap inflation led to the big plunge, but sentiment took another hit Wednesday as data showed wholesale price inflation hit 8.2 percent in May -- the highest level in years.
But Indian share prices rose nearly two percent amid news of Japanese pharmaceutical group Daiichi Sankyo's decision to buy a majority stake in India's top drug company, Ranbaxy Laboratories, for up to 4.6 billion dollars.
Australia, South Korea and Singapore also ended in the black, but Hong Kong and Taiwan fell back.
Wall Street had wobbled to a mixed close Tuesday, with the Dow Jones edging up as investors digested a tough message on inflation from Federal Reserve chairman Ben Bernanke, which sparked talk of US rates hikes.
The US is also battling slowing growth following the subprime mortgage default crisis, which has led to a global credit crunch and hit the world economy.
The dual concerns about inflation and economic growth pummeled Asian stocks Monday and Tuesday after a Wall Street slide at the end of last week.
TOKYO: Japanese share prices closed up 1.16 percent, dealers said.
The benchmark Nikkei-225 index rose 162.31 points to end at 14,183.48. The broader Topix index of all first-section shares added 6.83 points or 0.49 percent to 1,390.03.
Japan's economy grew at a brisk 4.0 percent annualized pace in the first quarter of 2008, better than an initial estimate of 3.3 percent, data showed.
But the market "has not determined which way to go amid inflationary risks and higher oil prices," Yoshinori Nagano, senior strategist at Daiwa Asset Management, told Dow Jones Newswires.
Toyota Motor rose 2.4 percent to 5,550 yen and Honda Motor climbed 2.7 percent to 3,800 yen.
Daiichi Sankyo rose 4.9 percent to 2,975 yen on reports, later confirmed, that the drugmaker has agreed to buy a majority stake in India's Ranbaxy Laboratories.
Upon completion of the transaction, which is valued at 3.4-4.6 billion dollars, Ranbaxy is expected to become a subsidiary of Daiichi Sankyo, the two companies announced after the close of trading here.
HONG KONG: Hong Kong share prices closed down 0.21 percent, dealers said.
The Hang Seng Index closed down 47.92 points at 23,327.6. Turnover was light at 62.91 billion Hong Kong dollars (8.07 billion US).
Cosco Pacific which fell 8.5 percent to 12.96 Hong Kong dollars.
Chinese stocks in Shanghai closed 1.57 percent lower.
Participation "in the market was very poor following Tuesday's plunge with many investors staying on the sidelines," YK Chan, a fund manager at Phillip Asset Management, told Dow Jones Newswires.
China Mobile fell 1.4 percent to 108.90 dollars, and Bank of Communications fell 1.3 percent to 9.56 dollars.
SYDNEY: Australian stocks closed up 0.6 percent, dealers said.
The benchmark S&P/ASX 200 index gained 29.8 points to end the day at 5,467.3 while the broader All Ordinaries climbed 17.6 points to 5,561.9.
Turnover was 1.98 billion shares worth 6.7 billion dollars (6.3 billion US).
Dealers said financial stocks could continue to gain as the US dollar strengthens.
"We expect that to cause rotation from commodity stocks to financials in particular," senior dealer at Bligh Capital, Tony Brinker, told Dow Jones Newswires.
National Australia Bank rose 3.0 percent to 28.80 dollars. BHP Billiton added 0.4 percent to 43.44 dollars but takeover target and rival Rio Tinto dropped 1.1 percent to 132.10 dollars.
SHANGHAI: Chinese stocks closed down 1.57 percent, dealers said.
The benchmark Shanghai Composite Index, which covers A and B shares, closed down 48.09 points at 3,024.24 on turnover of 54.2 billion yuan (7.8 billion dollars).
"Investors are worried that inflation and other data will be higher than expected," said Wu Feng, an analyst at TX Investment.
The key index at one time in the morning trade sank to below 3,000 points and it closed at the lowest level since March 19, 2007.
The producer price index, or PPI, gained 8.2 percent in May from a year earlier.
The Shanghai A-share Index lost 50.75 points at 3172.42. The Shenzhen A-share Index shed 27.22 points at 946.20.
Poly Real Estate fell 7.09 percent to 14.81 yuan, while Beijing North Star shed 6.19 percent to 7.12 yuan. Shandong Gold-Mining fell 9.63 percent to 51.51. Air China down 5.82 percent to 10.35 yuan. PetroChina was down 1.43 percent.
The Shanghai B-share Index rose 0.32 percent to 227.75. The Shenzhen B-share Index was up 1.27 percent at 517.21.
TAIPEI: Taiwan share prices closed 0.29 percent lower, dealers said.
The weighted index closed down 24.41 points at 8,345.59 on turnover of 107.20 billion Taiwan dollars (3.54 billion US).
"The trading extended the losses sparked by the oil price spike and the higher-than-expected US jobless rate," said Bentham Hung of Mega Wealth International Management Consultant Co.
"China's fresh bids to tighten credit as part of its efforts to battle inflation also added pressure to the market," he said, adding that the weighted index may seek support at the 8,000 point level.
Formosa International Hotels was down 5.99 percent to 643.00 dollars. Taiwan Semiconductor Manufacturing Co. was up 2.35 percent at 65.40. United Microelectronics Corp. was down 0.8 dollars at 17.7.
SEOUL: South Korean shares closed 0.4 percent higher, dealers said.
The KOSPI index ended 7.29 points higher at 1,781.67. Volume was light at 4.9 trillion won (4.75 billion dollars).
"High-tech stocks, along with chemical and auto sectors, led the rebound, with hopes for strong second-quarter earnings as a catalyst," said Choi Seong-Rak, an analyst at SK Securities.
Political instability at home is another concern. South Korea sets interest rates Thursday.
Samsung Electronics rose 2.3 percent to 681,000 won. LG Display gained 1.9 percent to 42,850. LG Chem surged 6.9 percent to 108,000 won after positive analyst comments on its battery business. Hyundai Motor advanced 1.1 percent to 79,600 won.
SINGAPORE: Singapore share prices closed 0.45 percent higher, dealers said.
The blue chip Straits Times Index rose 13.72 points to 3,046.77 on volume of 1.11 billion shares worth 1.44 billion Singapore dollars (1.05 billion US).
"It's not major buying. There's still lots of uncertainty around. We're not going to bounce in a big way," said a local brokerage house analyst.
DBS Group gained 32 cents to 19.48 Singapore dollars. City Developments rose 14 cents to 10.64. Singapore Airlines advanced four cents to 15.12.
KUALA LUMPUR: Malaysian stocks ended little changed, dealers said.
The Kuala Lumpur Composite Index fell 1.68 points to 1229.28.
"Local funds accumulated government-linked stocks, oversold construction stocks and some property plays but profit-taking in plantation stocks and blue chips by short-term investors erased gains," a dealer told Dow Jones Newswires.
Tenaga gained 1.2 percent at 8.50 ringgit, while gaming giant Genting was down 3.5 percent at 5.45 ringgit.
BANGKOK: Thai shares closed little changed, dealers said.
The Stock Exchange of Thailand (SET) composite index slipped 0.28 points to close at 791.66, while the blue-chip SET 50 index rose 0.04 points to 566.14.
Kavee Chukitkasem, assistant managing director at Kasikorn Securities, said the market was volatile.
"Concerns over oil prices, inflation rates and politics remained, causing investors to stay on the sidelines," Kavee said.
Thailand's inflation rate jumped to a 10-year high of 7.6 percent in May as soaring fuel prices pushed up costs in food and other sectors.
Meanwhile, small political rallies against Thailand's government have been rumbling on for more than two weeks, led by activists whose protests in 2006 eventually led to a coup against premier Thaksin Shinawatra.
PTT lost 4.00 baht to close at 320.00 baht. Bangkok Bank slipped 1.00 to 118.00. Thai Airways International slipped 0.10 at 23.30.
JAKARTA: Indonesian shares closed little changed, dealers said.
The Jakarta Composite Index ended up 4.03 points at 2,374.78.
"Investors swiftly cashed in their gains on any rebound," a trader said.
Bank Mandiri ended up 3.7 percent at 2,800 rupiah. Coal miner Indika Energy closed up 16 percent on debut but heavyweight Telkom was down 2.5 percent at 7,750.
MANILA: Philippine share prices closed down 2.5 percent, dealers said.
The composite index fell 66.67 points to 2,579.28 points. The all-share index fell 1.67 percent to 1,639.08 points.
"Inflation is still a major concern even though oil prices have fallen slightly," said Rommel Macapagal of Westlink Global Equities Inc.
"The past few weeks, we have been looking for directions and the direction we got was the big drop on Friday in the US market," he said.
Philippine Long Distance Telephone Co. fell 4.1 percent to 2,335 pesos. Ayala Corp. dropped 4.9 percent to 290 pesos. Bank of the Philippine Islands fell 1.01 percent to 49 pesos.
WELLINGTON: New Zealand share prices closed 0.53 percent lower, dealers said.
The NZX-50 gross index fell 18.47 points to 3,487.43.
The local market was still suffering aftershocks from the big falls in US stocks on Friday, said James Smalley, a client adviser with Hamilton, Hindin, Greene.
Telecom fell six cents to 3.80 dollars, Contact Energy gained seven cents to 8.66, and Fletcher Building dropped 21 cents to 7.14, after touching a 30-month low of 7.10 during the day.
MUMBAI: Indian shares closed up 1.99 percent, dealers said.
The benchmark Mumbai 30-share Sensex index rose 296.07 points to 15,185.32.
"This appears to be a brief bounce after a sharp slide. High crude, rising inflation and re-rating of corporate earnings will keep the markets subdued in days ahead," said a dealer at brokerage Prabhudas Lilladher.