Most Asian markets declined Friday on lingering worries about the U.S. financial sector but China's benchmark index jumped 3 percent as oil refiners rallied on news of fuel price hikes there.
The Shanghai Composite Index advanced 3 percent or 82.86 points, to 2,831.74. Th index jumped more than 6 percent earlier in the day but later lost some of those gains on profit-taking.
Market heavyweight PetroChina, the listed unit of China's biggest oil and gas company, gained 4.6 percent to 15.86 yuan after the government announced late Thursday that it was boosting prices for gasoline and diesel fuel by 16 percent and 18 percent respectively, beginning Friday.
Refiners have seen huge losses due to a gap between surging international crude oil prices and domestic fuel prices. The price hike is expected to help staunch some of that red ink by allowing the refiners to pass a part of these higher costs for crude oil on to consumers.
Market heavyweight PetroChina rose 4.6 percent and China Petroleum & Chemical Corp., or Sinopec, gained 2.1 percent.
Among other big gainers, Huaneng Power International rose by the daily 10 percent limit, while Industrial & Commercial Bank of China rose 0.4 percent.
But investors remain leery about the potential for the price increases to push inflation higher. That might oblige the government to tighten credit further and hurt other industries' earnings, analysts said.
"This may be why the market only closed 3 percent higher. In my opinion, the trend is still downhill," said Zhai Peng, an analyst at Guotai Jun'an Securities, in Shanghai.
In Tokyo, stocks slumped on worries about the U.S. economy, a vital export market. The benchmark Nikkei 225 index lost 188.09 points, or 1.33 percent, to end the week's trade at 13,942.08.
"Investors sold shares on renewed concerns about the health of the U.S. financial institutions," said Mitsushige Akino, fund manager at Ichiyoshi Investment Management in Tokyo.
Sentiment worsened after Wall Street dipped below the key 12,000 mark Thursday for the first time since mid-March and Citigroup Inc. warned that a "substantial" amount of write-downs on bad debt are still to come, Akino said.
Citi was among the steepest decliners of the 30 stocks that make up the Dow Jones industrial average, which ended the day up 0.3 percent.
"Investors were concerned about such external factors on the Japanese economy," he said.
Bank Mizuho Financial Group Inc. lost 0.7 percent and rival Mitsubishi UFJ Financial Group fell 3.2 percent. Automakers Honda Motor Co. fell 0.8 percent, and Toyota Motor Corp. lost 1.5 percent.
In Hong Kong, the blue chip Hang Seng Index fell 52.01 points, or 0.23 percent, to close at 22,745.6. The benchmark index was up 1.28 percent at midday before switching course in late trade as investors locked in profits.
"There's too many uncertainties in the markets now. Investors have no confidence in it," said Ben Kwong, the chief operating officer at KGI Securities. "They don't want to keep their stocks for too long, so they're looking for opportunities to sell."
He added the market will remain volatile in the near term amid investors' concerns about the global economic outlook. Still, some analysts remain bullish about the Hong Kong market, saying it has been oversold.
"It's near the bottom. Once the U.S. markets become stable, the Hong Kong market will rebound," said Ernie Hon, an analyst from ICEA Securities.
Elsewhere in the region, Australia's key index fell 1.5 percent, while South Korea's Kospi dipped 0.6 percent.
In currency trading, the dollar bought 107.91 yen mid- afternoon in Tokyo, down from 108.04 yen late Thursday in New York. The euro rose to US$1.5533 from $1.5497. (****)
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