Asia report: Oil leads most stocks higher while Japan lags

Asian markets rose on Thursday, tracking upwards with oil prices, which were boosted in US trading overnight as the dollar suffered its worst day in seven years.

Weaker than anticipated service sector data out of the United States put pressure on the greenback, which led to serious gains for commodities overnight extending into the Asian trading day.

Chinese markets marched upwards, with the Shanghai Composite gaining 1.53% and the technology-heavy Shenzhen Composite up 1.95%.

There was speculation in the People's Republic that "the Fed may only increase interest rates twice this year, largely down from previous market expectations", said Guodu Secutiries analyst Xiao Shijun, leading to the lift in Chinese stocks.

In Hong Kong, the Hang Seng Index climbed 1.01%. Traders in the special administrative region were also buoyed by market sentiments on the mainland, with the Hang Seng China Enterprises Index - made up of Chinese companies with listings in Hong Kong - rising 1.5%.

Energy companies in Hong Kong shot up 4.6% off the earlier oil gains.

In Tokyo, the Nikkei 225 managed to claw back from losses of as much as 1.5% to close down 0.85%. Japanese shares came under pressure as the safe harbour of the yen lost some of its strength. It was last at JPY 117.57 to the dollar.

That decline practically cancelled the equity gains effect of the Bank of Japan's negative interest rates announcement last Friday.

Sharp Corporation bucked the Tokyo trend, however, rising 16.79% after rumours spread that it was in talks with Taiwan's Hon Hai Precision Industry - doing business as Foxconn - over a possible takeover.

"Hon Hai has a massive capital base. Under Hon Hai, Sharp would be able to increase capital expenditure drastically to raise output", said Okasan Securities senior strategist Hideyuki Ishiguro.

"It would have a better chance of regaining competitiveness", Ishiguro added.

Elsewhere in Asia, Seoul's Kospi moved higher, up 1.35%. The S&P/ASX 200 closed up 2.12% after a powerful rally in commodities and mining stocks. BHP Billiton shot up 8.3% in Sydney, and Rio Tinto 8.9%.

In Wellington, the S&P/NZX 50 lagged behind its regional counterparts, rising 0.1% as investors kept their wallets shut ahead of New Zealand's earnings season.

The down under dollars were stronger still against their US namesake, with the Aussie 0.85% higher at AUD1.3852 and the Kiwi gaining 0.89% on the greenback to NZD1.4871.

Despite the rocketing oil prices in the US overnight, trade in Asia was choppy. Brent crude was last up 0.31% to $35.15 and West Texas Intermediate up 0.89% to $32.57.