Asian stocks close mostly flat as oil haunts investors

Asian stocks closed mostly flat on Friday with investors haunted by the impact of rising crude, after the price of oil struck US$66 a barrel in Asian trade, dealers said.

They said any gains, inspired by Wall Street's overnight rally, were eroded or capped with investors waiting to see how far the oil spike will go.

However, dealers said while oil has thus far not impacted on economic growth, its recent rapid price climb has crude now approaching levels of concern.

Kuala Lumpur continued to suffer a double blow: oil prices and the choking haze which dealers said held the potential to hurt economic growth.

Only Manila appeared to buck the trend, rising 0.71 percent amid expectations the Supreme Court will rule in favor of the government's new value-added tax later this month.

The tax is widely viewed as crucial to government efforts to address a reliance on debt-based financing and avert a fiscal crisis.

In Taipei share prices closed 0.04 percent lower on Friday as a fall in electronics stocks countered early market gains driven by an overnight rally on Wall Street.

Dealers said that although a record-breaking run in global oil prices supported raw materials companies and asset-backed stocks, high energy costs sparked concerns in the electronics segment.

"Electronics suffered from further profit-taking as expectations of an industry improvement had already been factored into the shares," said Tom Tang (湯建源), president of Kai Yuan Securities Investment Consultant Co (開元投顧).

Investor interest switched from electronics to old-economy stocks, he said.

"Riding on high oil prices, liquidity switched to old-economy stocks, and thanks also to a technical rebound after the previous correction," he added.

However, although energy price concerns led some investors to switch into defensive plays, electronics stocks will still be crucial to the broad market's prospects going forward, Tang said.

"The key point is whether electronics firms' earnings will improve as expected," he said.

The TAIEX closed down 2.81 points at 6,350.90, on turnover of NT$91.03 billion (US$2.85 billion).

Tokyo share prices closed flat after weaker-than-expected June quarter growth figures as investors locked in profits from the four-day rally ahead of the figures' release.

"Investors opted to take profits on the weaker-than-expected GDP headline figures, after share prices here surged rapidly in recent sessions," said Yutaka Miura, chief strategist at Shinko Securities.

Before the opening bell, the government reported that the economy grew 0.3 percent in the three months to June from the previous quarter, less than the anticipated 0.5 percent.

"Foreign investors stepped up their purchases in domestic-demand-related firms for the past several sessions, but they were also looking for opportunities to lock-in gains. The GDP just provided a good chance for them," said Masayoshi Yano, senior strategist at Tokai Tokyo Research Center.

The NIKKEI-225 index fell 1.64 points to 12,261.68.

South Korean share prices closed 0.57 percent higher on Friday, led by Samsung Electronics as the market shrugged off record global oil prices.

Dealers said Wall Street's overnight rally provided an initial boost and gains extended further ahead of a three-day break.

The KOSPI index closed up 6.45 points at 1,130.22.

Hong Kong share prices closed flat as the market took a breather following gains of nearly 400 points in the last two sessions. The Hang Seng Index closed up 5.75 points at 15,450.95.