Asian markets ended mostly lower Friday, with the overnight fall in oil prices weighing on resource shares, but Shanghai bucked the trend, as oil refiners and power generators advanced after the government's decision to raise fuel prices.
The benchmark Shanghai Composite Index ended up 3% at 2831.74, bouncing back form a 6.5 % decline a day earlier. The Shenzhen Composite Index rose 1.8% to 794.75.
Late Thursday night, Beijing said it will lift gasoline and diesel prices by 17%-18%, the biggest price increase in more than four years. Shares of PetroChina ended up 4.6%.
Beijing also announced a move to lift electricity prices by 4.7% for business and industrial users, effective July 1. Both Huadian Power International and Huaneng Power International rose by the maximum limit of 10% on the announcement.
"Power generators had been tumbling because Beijing's price control measures meant they couldn't pass on higher coal prices to their customers, and last night's price hike is giving an impetus to intense bargain hunting," said Orient Securities analyst Mo Guangliang.
However, higher fuel and electricity prices will raise costs for airliners, cement makers and steel makers. China Eastern Airlines ended down 3.8%, Anhui Conch Cement fell 2.4% and Wuhan Iron & Steel was 4.1% lower.
Elsewhere in the region, most indexes ended Friday in negative territory.
Tokyo stocks fell as resource shares were battered by softening crude prices overnight, with investors selling shares across the board to lock in profits before the weekend. The Nikkei 225 Stock Average fell 188.09 points, or 1.3%, to 13942.08. The Topix index of all the Tokyo Stock Exchange First Section issues fell 18.86 points, or 1.4%, to 1356.74.
Oil shares and trading houses were hurt after crude prices closed down $4.75 at $131.93 in New York. Inpex Holdings /zigman2/quotes/206689846/delayed JP:1605 -0.48% dropped 3.7%, Mitsubishi /zigman2/quotes/208582984/delayed JP:8058 +1.75% fell 2.3% and Itochu lost 2.4%.
Sanyo Electric and other energy-related shares such as battery makers were sold on profit-taking. Sanyo dropped 5% and GS Yuasa /zigman2/quotes/209233174/delayed JP:6674 +2.82% fell 7.8%.
Hong Kong's Hang Seng Index fell 52.01 points, or 0.2%, to 22745.60, reversing from a gain of up to 2.7% earlier in the trading session.
Chinese oil producers PetroChina /zigman2/quotes/204979431/delayed HK:857 -1.13% and Sinopec /zigman2/quotes/202085942/delayed HK:386 +0.56% led the day's early rally, underpinned by expectations the companies will be the biggest beneficiaries of China's rise in oil prices. But their gains also narrowed by the afternoon as "it is far from clear whether this move will boost their earnings given the nature of their businesses," said Castor Pang, a strategist at SHK Financial.
Sinopec ended up 1.1%, narrowing from a 4.7% rise, and was the day's most heavily traded stock. PetroChina rose 1.6%, narrowing from a 5.8% jump.
Along with a fuel-price increase, the Chinese government also announced a temporary price cap on thermal coal, which hurt Hong Kong-listed coal producers. Among the producers, Yanzhou Coal /zigman2/quotes/208182033/delayed HK:1171 -0.33% had the sharpest decline, shedding 7.5%. The company will be hardest hit by the new measures given its 70% exposure to spot sales, UOB KayHian said in a report Friday.
"Yanzhou's earnings for 2009 will be vulnerable to coal price volatility and rising cost pressure if the company fails to boost its output growth," the brokerage said. Shenhua Energy /zigman2/quotes/206065610/delayed HK:1088 +2.17% fell 4.3%, and China Coal /zigman2/quotes/201486584/delayed HK:1898 0.00% declined 3.7%.
In South Korea, shares fell due to concerns over global inflationary pressure and economic growth, which led foreigners continue to sell off local shares.
The Korea Composite Stock Price Index, or Kospi, opened higher after oil prices fell overnight but later fell on intensified concerns that Beijing's decision to cut subsidies on domestic fuel may boost China's consumer prices, triggering worries that Chinese authorities may tighten monetary policy further, said analysts.
The Kospi lost 9.72 points, or 0.6%, to end at 1731.00 after hitting an intraday high of 1755.60.
Refiners were the biggest decliners after the country's Fair Trade Commission said Thursday it will abolish the existing regulations requiring gas stations to sell only one brand of oil products. This triggered worries that competition may become fierce among refiners, said Hyundai Securities' analyst Bae Sung-Young. SK Energy, the country's biggest refiner by output, slid 4.4%, while S-Oil lost 3.8%.
The Australian share market hit its lowest level in almost three months Friday as major stocks tumbled amid concern about oil prices, interest rates and the outlook for Wall Street. The benchmark S&P/ASX 200 closed down 78.3 points or 1.5% at 5288.3.
In currencies, the dollar was little changed against the yen, trading at ¥107.90, compared with ¥107.98 late Thursday in New York.
Write to Dow Jones Newswires editors at firstname.lastname@example.org