Asian markets ended mixed Wednesday, as crude oil's decline boosted airline and auto stocks but weighed on energy-related shares.
Tokyo's benchmark Nikkei 225 Index rebounded from the previous day's sharp losses to close 0.6% higher at 120689.59.
Investors bought shares in auto and auto-linked companies but dumped oil-related stocks in the face of a continuing slide in global oil prices.
Oil prices dipped below $108 a barrel Wednesday as investors shifted attention to concern over slowing global demand for crude after Hurricane Gustav left oil installations in the Gulf of Mexico region largely undamaged.
Japan's top auto maker, Toyota /zigman2/quotes/203803129/delayed JP:7203 +0.72% , rose 2.1% and its rival Nissan /zigman2/quotes/208298710/delayed JP:7201 -2.15% added 2.4%. Honda /zigman2/quotes/200490352/delayed JP:7267 +0.66% jumped 5.1%. Bridgestone /zigman2/quotes/205589013/delayed JP:5108 -0.33% , the world's largest tire and rubber-products maker, rose 5.6%.
Paper shares also rallied, with Nippon Paper Group jumping 9.1% while Oji Paper /zigman2/quotes/206593707/delayed JP:3861 +1.70% rose 6.9% as worries about high material costs receded after crude prices fell.
However, Nippon Oil, Japan's largest oil refiner, fell 1.9%. Trading houses also declined on lower crude and gold prices overnight. Mitsui & Co. /zigman2/quotes/205346820/delayed JP:8031 -0.55% dropped 7.3% and Mitsubishi fell 4.6%.
In Hong Kong, the Hang Seng Index shed 2.2% to close at 20585.06 as oil's decline weighed on resources and commodities shares.
Among notable decliners, upstream oil producer CNOOC /zigman2/quotes/203421416/delayed HK:883 +1.00% lost 6% while PetroChina /zigman2/quotes/204979431/delayed HK:857 -1.44% slid 3.2%. China's coal producer Aluminum Corp. of China /zigman2/quotes/202960704/delayed HK:2600 -1.32% , or Chalco, also tumbled 6.4%.
Bucking the downward trend, airline stocks gained, with Cathay Pacific /zigman2/quotes/203532437/delayed HK:293 +2.66% adding 0.5%.
Major juice maker China Huiyuan Juice Group /zigman2/quotes/201730336/delayed HK:1886 0.00% more than doubled after the world's biggest beverage company Coca-Cola offered to buy the company for $2.4 billion.
Weakness in the financial sector dragged the mainland's benchmark Shanghai Composite Index, which tracks both Class A and Class B shares, down 1.2% to 2276.67.
Analysts said declines in the neighboring stock markets dampened already weak sentiment in the Class A-share market, and resulted in a selloff as investors rushed for the sidelines.
Banks, which are regarded as the proxy for China's economy, remained weak. ICBC fell 1.1%, China Construction Bank dropped 1.4% and Bank of China shed 0.3%.
China Vanke shed 2.4% on news reports that the property developer postponed part of its sale of up to 5.9 billion yuan ($863.2 million) of bonds. The company said after the markets closed that the sale will proceed as planned.
Despite the market's overall tumble, airlines rose after crude oil prices fell. Air China gained 2% while China Southern Airlines rose 3.4%.