Asian energy stocks gained on higher oil prices and speculation that CNOOC Ltd (中國海洋石油), China's third-biggest oil producer, will report a jump in last year's earnings.
"We don't expect a retreat in oil prices," said Mona Chung, who helps manage an US$800 million fund that includes Chinese oil stocks at Daiwa Asset Management Ltd in Hong Kong.
In China Chung said that "oil companies are still looking for opportunities to acquire assets around the globe and depending on the pricing, there may be some upside" for their shares.
Kansai Electric Power Co, Japan's second-biggest electricity generator, led declines by power companies following a fire last night at its Ohi nuclear plant in Fukui Prefecture, in the west of the country. Australia's BHP Billiton led mining shares higher as zinc and copper prices rose.
The Morgan Stanley Capital International Asia-Pacific Index, which includes 14 markets across the region, fell 0.2 percent to 128.12 as of 7:29pm in Tokyo. The measure that tracks energy stocks gained the most, rising 1.2 percent, led by PetroChina Co (中國石油天然氣).
Japan's Nikkei 225 stock average dropped 6.11 points to 16,489.37. All other regional indexes gained except in Taiwan and India. Pakistan's market is closed for a holiday.
CNOOC rose 2.4 percent to HK$6.35. The Beijing-based company is expected to announce today that profit grew 65 percent to 26.8 billion yuan (US$3.3 billion) last year, based on the average estimate of 26 analysts in a Thomson Financial survey.
Crude oil for May delivery in New York rose as much as 1.4 percent to US$62.65 a barrel after a US government report showed an unexpected drop in US inventories. The contract recently traded at US$62.18.
US stockpiles declined 0.4 percent to 338.6 million barrels in the week ended March 17, the first drop in six weeks.
Analysts had expected supplies to rise, according to a Bloomberg News survey. Refiners typically build stockpiles as they prepare to increase gasoline production to meet peak summer demand for motor fuel.
PetroChina, the nation's biggest oil producer, rose 1.9 percent to HK$7.95. Woodside Petroleum Ltd, Australia's second-largest oil and gas producer, rose 1.4 percent to A$43.60. PTT Pcl, Thailand's largest energy company, rose 0.8 percent to 240 baht.
The four nuclear reactors at the Kansai Electric's Ohi power plant were unaffected by last night's fire, detected at a building for radioactive waste, Yasushi Nakagawa, a spokesman for the company said.
`"Investors are concerned the accident may have a negative impact on public opinion about nuclear reactors," said Masayuki Kubota, who oversees US$2.1 billion at Daiwa SB Investments Ltd in Tokyo. "The selling today [March 23] is a response to the news."
Kansai Electric declined 1.8 percent to 2,720 yen. Tokyo Electric Power Co, which suffered problems with safety inspections, causing its reactors to be shut down in 2003, fell 1.3 percent to 3,060 yen.