HONG KONG - ASIAN stocks closed mostly up Friday but that failed to dispel much gloom after this year's share price plunge, with the key Japanese market continuing its longest losing streak in decades.

The Tokyo bourse fell 0.21 per cent for the 12th consecutive trading day, doing so for the first time since the 1950s as the potential economic damage from soaring oil prices again hit investor sentiment.

The Taiwan stock market tumbled more than two per cent despite the historic launch of regular direct flights between the island and its rival China for the first time in nearly six decades.

Investors in Asia are worried that surging inflation amid high crude oil and food prices will end up slowing economic growth, dimming the prospects for Asian stocks even though they have fallen steeply since their peak last year.

Many were looking ahead to the annual summit in Japan next week of the Group of Eight (G8) industrial powers, which is expected to tackle the issue of high oil and food costs.

Among other key Asian markets, China and South Korea fell, but Australia, Hong Kong and Singapore ended higher.

India rallied more than 2.5 per cent despite official figures showing inflation stood at a more than 13-year high of over 11 percent. But the Mumbai bourse overall has tumbled since the start of the year.

Investors also continue to worry about the ailing US economy, which is battling to recover from a financial crisis and steep housing market downturn.

US financial markets will be closed on Friday for the country's Independence Day holiday.

KUALA LUMPUR
Malaysian share prices closed down 1.7 per cent Friday due to rising political uncertainty, dealers said.

The Kuala Lumpur Composite Index dropped 19.56 points to 1,134.14, led by falls in utility, banking and plantation stocks.

HONG KONG
Hong Kong share prices closed higher on Friday, up 0.9 per cent, on a strong earnings forecast by Industrial and Commercial Bank of China (ICBC) and bargain-hunting, dealers said.

The Hang Seng index rose 181.04 points to close at 21,423.82, off a high of 21,534.05. Turnover was light at 50.16 billion Hong Kong dollars (S$8.76 billion).

The mainland's biggest bank ICBC said its first-half net profit probably rose more than 50 per cent from 40.8 billion yuan a year earlier, lifted by interest income and fees, lifting its shares here by two per cent.

Exporter Li and Fung, which supplies consumer goods to stores such as US giant Wal-Mart, also jumped on the back of stronger retail sales and consumer spending in the United States.

'The Hong Kong market is oversold. Some stocks have fallen quite a lot and are now offering good value for investment,' said Mr Ben Kwong, chief operating officer at KGI Asia Ltd.

'But the overall momentum is quite limited, reflecting cautious sentiment because of higher oil prices and worries about inflation.'

Since the start of the year, the Hang Seng Index has fallen 23 per cent, with investors discouraged by the continuing credit crisis, rising oil prices, accelerating inflation and the threat of higher interest rates.

Hong Kong blue-chips rebounded Friday morning, while New World Development, Swire, Sinopec, Li & Fung, Yue Yuen and Netcom rose more than three per cent.

SHANGHAI
Chinese share prices closed down 1.24 per cent on Friday as losses in oil refineries and coal miners offset a rally in banks, dealers said.

They said coal miners were hit by rumors of a possible tax reform that could impact the industry, while refiners remained weak after oil prices raced to record highs.

The benchmark Shanghai Composite Index, which covers both A and B shares, closed down 33.64 points at 2,669.89.

The Shanghai A-share index lost 35.32 points or 1.25 per cent to 2,800.11, while the Shenzhen A-share index shed 4.83 points, or 0.57 per cent, to 845.62.

TOKYO
Japanese share prices slipped for a 12th straight trading day on Friday, continuing their longest losing streak in more than five decades on worries about the earnings outlook, dealers said.

The Tokyo Stock Exchange's benchmark Nikkei index dropped 27.51 points or 0.21 per cent to end at 13,237.89. The broader Topix index of all first-section shares slipped 0.14 points or 0.01 per cent to 1,297.88.

The last time the benchmark fell for 12 straight sessions was in April 1954, when it declined for 15 straight trading days. -- REUTERS, AFP