Asian stocks closed mixed on Friday with profit takers moving in after the US Federal Reserve disappointed investors with another interest-rate hike.
Dealers said that the hike hit Wall Street, where the Dow Jones fell almost one percent, setting the mood for much of Asian trade.
But Japan escaped a sell-off following the release of the quarterly Tankan survey, which surpassed expectations, revealing a widespread economic outlook improvement in the manufacturing sector for the three months to June.
Taipei was higher on bargain hunting but Australia eased off record highs on the back of Wall Street's fall while the Philippines continued to be plagued by opposition efforts to oust President Gloria Arroyo.
Markets in Hong Kong and Bangkok were closed for public holidays.
The TAIEX closed 0.48 percent higher on Friday in modest trade as bargain-hunting in bellwether electronics stocks offset Wall Street's weak showing overnight.
Taiwanese share prices are expected to trade rangebound next week amid concerns over oil prices and weakening foreign investor support for the local market, dealers said on Friday.
But they said rising demand for the electronics sector in the third quarter should help ease the downside.
"The recent buying spree by foreign investors seemed to have come to a stop at the end of June and they are likely to be more cautious now and adjust their portfolios," said Daniel Hsin (辛日祺), senior vice president at Capital Securities Corp (群益證券).
Foreign investors started selling on Friday, ending a 21-day buying trend.
The bourse is likely to consolidate in the 6,200-6,350-point range over the next week pending crude oil price movements, which will in turn dictate Wall Street's performance, Hsin said.
"The market should find some support from the optimistic outlook for the electronic sector due to anticipated orders for DRAM, flat-panels and gameboards in the third quarter," he said.
Hsin said the Central Bank's recent hike of its key interest rates by 12.50 basis points is tolerable and unlikely to further affect the market.
The discount rate was raised to 2.0 percent from 1.875 percent, following a similar increase in March.
The TAIEX closed up 30.20 points at 6,272.14 on turnover of NT$57.83 billion (US$1.83 billion) on Friday.
For the week ending July 1, the TAIEX shed 68.55 points or 1.08 percent to 6,272.14, following a 0.75 percent gain in the previous week.
Average daily turnover stood at NT$67.25 billion, down from NT$81.40 billion a week earlier.
Tokyo share prices closed 0.40 percent higher after the Bank of Japan's quarterly Tankan survey showed a better-than-expected recovery in business sentiment.
The NIKKEI-225 index rose 46.12 points to 11,630.130.
In Seoul share prices closed 0.97 percent higher, extending gains for a fourth day to a four-month high, with investors reassured by the government's pledge not to raise interest rates.
Dealers said it was positive the market has made such ground this week to finish well above the key 1,000 points level, reflecting a more optimistic view on the economic outlook for the second half.
The KOSPI index was up 9.86 points at 1,018.02.
In Shanghai, share prices closed 2.35 percent lower, extending heavy losses in the absence of a fresh lead on the policy side from the authorities as coal miners and pharmaceuticals were badly hit.
Dealers said the response to individual company plans to dispose of their state-owned, non-tradable shares has been very mixed and opportunistic, with investors doubly disappointed the government has not come up with a bailout fund to help the market.
The Shanghai A-share Index tumbled 26.67 points to 1,108.46, while the Shenzhen A-share Index was down 9.06 points at 260.11. The benchmark Shanghai Composite Index, which covers both A and B-shares, shed 25.34 points at 1,055.59.
Australian share prices closed 0.11 percent lower as profit-taking and weaker oil stocks took the market off the record highs it reached earlier in the week.
The SP/ASX 200 index ended down 4.9 points at 4,272.6 on relatively light volume.
In Singapore share prices closed 0.12 percent lower on slight profit-taking ahead of the weekend. The Straits Times Index fell 2.71 points to 2,209.95.
Malaysian share prices closed 0.64 percent higher in mixed trade after a last minute rush to buy blue chips and other index-linked stocks, dealers said.
The composite index rose 5.70 points to 894.02.
In Jakarta share prices closed 1.48 percent higher on a rebound led by blue chips such as Telkom as foreign investors returned to the market to look for bargains. The composite index was up 16.612 points at 1,138.988.
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