Asian stocks closed off their lows on Friday after investors sent markets plunging over a shock interest-rate hike in China, raising fears that Beijing would act further to cool its fast running economy.
However, dealers said the rate rise was modest and had provided an excuse for profit taking with most markets trading around record levels.
The impact of the hike was also compounded by remarks overnight from the US Federal Reserve Chairman Ben Bernanke which put pressure on the US dollar, thus hurting the region's exporters.
As the selldown gathered pace bargain hunting opportunities emerged resulting in mixed performances across the region.
Seoul was hit hardest, falling 2.26 percent, while Tokyo, a major investor in China, slumped 1.23 percent and Hong kong ended the day down 0.49 percent.
But in Shanghai investors thought differently about the hike and its benchmark rose 1.69 percent. Modest gains helped Singapore to a record close while Sydney and Wellington were higher.
Mumbai also improved after a volatile day and an early ferocious sell-off sparked after authorities announced a crackdown on 24 brokerages.
Taipei share prices closed up 0.50 percent, led by technology stocks after the government eased restrictions on China-bound investments. The weighted index closed up 35.56 points at 7,171.77 on turnover of NT$132.97 billion (US$4.17 billion).
Dealers said gains in technology stocks offset profit-taking in other sectors, while steel took a big hit on concerns over demand following an interest rate hike in China.
"The deregulation of China-bound investments policy apparently served as a catalyst for technology stocks today," said Jack Tam, an assistant vice president with Yuanta Core Pacific Capital Management Co Ltd (元大京華投顧).
Tokyo share prices fell 1.23 percent as investors fretted about a firmer yen, a Chinese interest rate hike and Sony's profit outlook.
Dealers said many investors opted to lock in gains ahead of holidays in Japan next week when the market will only open for two days.
The NIKKEI-225 index fell 208.31 points to 16,906.23.
Seoul share prices closed 2.26 percent lower, ending a three-day advance, as Samsung Electronics, Kookmin Bank and steelmakers posted sharp declines. The KOSPI index fell 32.80 points at 1,419.73 on volume of 320 million shares.
Hong Kong share prices closed down 0.49 percent on Friday, but were off early lows after China raised bank lending rates in an effort to prevent an overheating of its economy.
The Hang Seng Index lost 81.55 points at 16,661.30.
Shanghai share prices rose 1.69 percent, hitting fresh 18-month highs on strong gains in the banks after China announced a hike in lending rates, with heavyweight oil refiners also in demand, dealers said. The Shanghai A-share Index jumped 25.06 points to 1,511.71 and the Shenzhen A-share Index was up 3.30 points or 0.91 percent at 365.87.
The benchmark Shanghai Composite Index, which covers both A and B-shares, added 23.49 points or 1.66 percent at 1,440.22, its highest level since Sept. 23, 2004.
Sydney share prices fell 0.78 percent in heavy trade. The SP/ASX 200 fell 41.4 points to 5,258.8 while the broader All Ordinaries Index was down 39.9 points to 5,207.0.
Singapore share prices closed 0.37 percent higher at an all-time high on gains in banking stocks ahead of the weekend.
RSS