MANILA (Thomson Financial) - (Adds closing levels throughout) Asian stocks were mixed on Wednesday with exporters helping lift the Nikkei index by more than 1 percent while extended losses in telecom stocks dragged down the Hong Kong and Shanghai markets.
Australia's key index managed modest gains as bargain hunters chased financial stocks, shrugging off another slump overnight on Wall Street where investors continued to worry about the ongoing fallout from the credit crunch.
'It just goes to show that we don't always slavishly follow the U.S.,' said Michael Heffernan, an equity analyst at Austock.
The Nikkei closed up 1.6 percent at 14,435.57 while the broader Topix rose 1.6 percent to 1,430.47.
Exporters gained on expectations a weaker yen will boost their profit margins.
'Investors appeared to focus more on the yen's depreciation, setting aside the problem of the credit markets,' said Soichiro Monji, chief strategist at Daiwa SB Investments.
Among exporters, Honda Motor rallied 8.6 percent to 3,790 yen, Nissan Motor advanced 5.3 percent to 974 yen, and Toyota Motor gained 3.2 percent to 5,570 yen. Mitsubishi Heavy Industries rose 5.1 percent to 593 yen.
Japanese banks also rebounded from Tuesday's selloff which was sparked by renewed fears about the credit crisis. Mizuho Financial Group was up 1.3 percent at 598,000 yen while Mitsubishi UFJ Financial gained 2.9 percent to 1,150 yen. Sumitomo Mitsui Financial Group rose 2.1 percent to 954,000 yen.
South Korea's Kospi ended up 0.8 percent at 1,833.81, also led by exporters on hopes the won's rally against the dollar will be short-lived.
The U.S. dollar got a boost overnight after Federal Reserve Chairman Ben Bernanke said inflation was a primary concern and acknowledged that the Fed's aggressive rate-cutting campaign had contributed to a weaker dollar.
In Sydney, the S&P/ASX 200 ended up 0.2 percent at 5,584.5. But the broader All Ordinaries index was 0.1 percent lower at 5,698.2.
Fortescue Metals, Australia's newest iron ore producer, retreated from record levels to close down 8.8 percent at A$10.71.
Australia's top investment bank, Macquarie Group, partially recovered from a two-day selloff to end up 2.9 percent at A$51.50 but smaller rival Babcock & Brown fell 4.5 percent to A$10.61.
National Australia Bank was 0.2 percent higher at A$29.44, Commonwealth Bank was up 0.4 percent at A$41.65, and ANZ gained 0.4 percent to A$20.47. Westpac added 1.3 percent at A$22.08 while its takeover target St. George advanced 1.3 percent to $30.52. Shanghai slips
The Hong Kong and Shanghai benchmarks fell, led by telecom stocks which were sold off on worries an ongoing revamp in the telecommunication sector will hurt earnings.
The Shanghai Composite lost 1.9 percent to 3,369.91 and the Hang Seng index was down 1.04 percent at 24,123.25.
Adding to their losses on Tuesday, China Unicom -- the smaller of two wireless carriers in the mainland -- fell 4.28 percent to HK$15.20, while rival China Mobile Ltd. shed 1.2 percent to HK$113.6 percent.
China Netcom slipped 3.39 percent to HK$22.8.
Analysts said there is concern the restructuring would mean extra costs for companies as they enter the mobile market where fresh investments will have to be made.
Energy stocks tracked the decline in oil prices Tuesday. Asia's largest oil company PetroChina Co. Ltd. was down 1.45 percent to HK$10.84 and offshore oil producer CNOOC Ltd. gave up 4.05 percent to HK$13.26.
Coal stocks dived on speculation prices of coal may decline along with the drop in oil prices. China Shenhua Energy Co, the mainland's largest coal producer, shed 4.9 percent to HK$33.9 and China Coal slumped 6.1 percent to HK$16.30.
Oil prices have fallen below $124 a barrel as demand concerns grew and Bernanke indicated more interest rate cuts are unlikely. Bernanke's comments sent the dollar higher and raised questions about oil's ability to reach new highs in the short term.
Elsewhere, South Korea's Kospi finished up 0.8 percent at 1,833.81 while Singapore's Straits Times Index ended 0.6 percent lower at 3,134.80.
The Kuala Lumpur Composite Index finished down 0.4 percent at 1,253.12. Malaysia will announce its fuel subsidy reform at 0900 GMT Wednesday, Domestic Trade Minister Shahrir Samad said.
The government is expected to announce it will scrap fuel price controls in August, allowing pump prices to rise to market levels and impose a system of quotas or cash handouts.
The Philippine Composite closed down 0.3 percent at 2,773.12. Most investors played it safe ahead of the release of May inflation data and the central bank's decision on interest rates, both scheduled for Thursday.
Economists expect the Philippine central bank to hike interest rates by 25 basis points, with annual inflation in May projected to come in between 8.8 percent and 9.6 percent -- from a three-year high of 8.3 percent in April -- following the recent rally in crude oil prices. It would be the first rate hike since October 2005.
In Indonesia, investors were reluctant to hold stocks ahead of Thursday's interest rate decision by the central bank. The Jakarta Composite fell 1.7 percent to close at 2,385.06.
Taiwan's weighted index closed up 0.56 percent at 8,627.80 and India's Sensex provisionally ended 2.87 percent lower at 15504.88. tfn.newsdesk@thomsonreuters.com ed/zr/ed/zr/pvi/ypv COPYRIGHT Copyright Thomson Financial News Limited 2008. All rights reserved. The copying, republication or redistribution of Thomson Financial News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Financial News.
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