Asian stock markets were mixed on Thursday as Shanghai showed signs of reviving after China's rate hike put the region on edge, while oil prices again rose due to worries about Egypt.
The Shanghai Composite Index was 1.31 percent higher in the afternoon led by a surge among car makers after they reported strong January sales, as well as software firms, which were lifted by a government pledge to support the sector.
Sydney's S&P/ASX 200 ended up 0.19 percent, or 9.6 points, at 4,914.4, following strong employment data and ahead of full-year results later from heavyweight Rio Tinto.
However Hong Kong's Hang Seng was down 0.73 percent by the break and has lost nearly four percent this week.
Tokyo's Nikkei closed 0.11 percent, or 12.18 points, lower at 10,605.65 as Japanese traders went into consolidation mode before a public holiday and after a weak lead from Wall Street.
In Tokyo, Toyota Motor stood out, with the car giant's shares surging after it revised its full-year earnings outlook upwards, the US government found no fault with electronic systems blamed for acceleration problems, and reports emerged of a planned joint venture in Russia's Far East.
China's latest move to rein in inflation with an interest rate hike on Tuesday continued to worry Hong Kong, as US Federal Reserve chief Ben Bernanke made rare criticism of the Beijing central bank's anti-inflationary strategy.
Steven Leung, sales director at UOB KayHian in Hong Kong, told Dow Jones Newswires that "inflationary pressures in China continue to unnerve investors and we don't expect any rebound in the local bourse to be significant."
Adding to market worries, a newspaper controlled by the Chinese central bank carried a prediction by a government economist that inflation could exceed five percent for the first two months of the year.
However one Hong Kong fund manager said a general flight away from emerging markets due to the crisis in Egypt might now be a more significant factor weighing on shares.
On Wednesday Bernanke called China's interest rate hike a "surprising" way to tackle inflation, and urged Beijing to instead let its currency rise.
In rare criticism of another central bank's policies, he told a committee in the House of Representatives: "It would be both in our interest and in the Chinese interest for them to raise the value of their currency. And it would help them with their inflation problem."
US stocks closed mixed in listless trading Wednesday as investors shrugged off a comment by Bernanke that the US economic recovery appeared to have strengthened but unemployment remained high, as well as merger and acquisition activity in the stock exchange sector.
The Dow Jones Industrial Average rose just 0.06 percent, the broader S&P 500 index fell 0.28 percent, while the tech-rich Nasdaq dropped 0.29 percent.
Oil prices were higher in Asia on persistent concerns over the situation in Egypt, where the embattled government has warned of a military crackdown against protesters.
New York's main futures contract, light sweet crude for March, climbed 32 cents to $87.03 a barrel in afternoon trade.
The contract fell overnight on rising US crude stockpiles, an indication of weak demand from the world's biggest oil-consuming nation.
Brent North Sea crude for delivery in March was up 27 cents to $102.09 a barrel on the IntercontinentalExchange (ICE) in London.
"We expect the market to continue to price in a supply-risk premium as geopolitical tensions rumble on near-term," Standard Chartered analysts said in a research note.
On foreign exchange markets, the dollar strengthened to 82.52 yen in Tokyo morning trading compared with 82.35 yen in New York late Wednesday.
The euro fetched $1.3698, down from $1.3727 in New York, and was flat at 113.03.
Gold opened at $1,363.50-$1,364.50 an ounce in Hong Kong, a touch down from its closing price on Wednesday of $1,364.00-$1,365.00.
In other markets:
-- Seoul ended 1.81 percent, or 37.08 points, off at 2,008.50.
-- Taipei fell 1.89 percent, or 170.26 points, to 8,836.56.
Acer fell 3.18 percent to Tw$73.1 while TSMC was 2.44 percent lower at Tw$72.0.
-- Manila fell 2.73 percent, or 105.06 points, to 3,738.31, a five-month low, dragged down by inflation concerns.
Aboitiz Equity fell 0.9 percent to 33.30 pesos, Philippine Long Distance Telephone Co. dropped 1.1 percent to 2,380 pesos and Metropolitan Bank and Trust Co. fell 5.3 percent to 57.75 pesos.
-- Wellington fell 0.61 percent, or 20.61 points, to 3,365.87.
Freight company Mainfreight fell 2.3 percent to NZ$8.20, Steel & Tube rose 5.3 percent to NZ$2.39 and Fletcher Building dropped 0.5 percent to NZ$8.11.
