UPDATE:Asian Shares Mixed; Oil Stocks In Play

SINGAPORE -- Regional stock markets were mixed Thursday with the positive sentiment from Wall Street's higher close being watered down by caution surrounding Chinese markets. Energy stocks were higher after crude oil futures surged to a two-month high in New York.

On Wednesday the Dow Jones Industrial Average ended up 0.7% at 9279.16, its second-straight finish higher. Energy giants Exxon Mobil and Chevron led the gains, closing 2.3% and 1.8% higher, respectively.

Japan's Nikkei 225 was up 1.1%, Australia's S&P/ASX 200 was down 0.1% , South Korea's Kospi Composite had gained 0.8% while New Zealand's NZX-50 was 0.8% lower. DJIA futures were 15 points higher in screen trade.

China shares rebounded from Wednesday's losses, lifted by oil companies which rose after Wednesday's gain in crude oil futures. "When heavyweights such as PetroChina rise, it's natural for the overall index to rise," said Central China Securities analyst Zhang Gang. The Shanghai Composite Index was up 2.1%, helping to support confidence in the rest of the region.

Hong Kong's Hang Seng Index was up 1.8%, helped by Wall Street's and the Shanghai Composite Index's gains.

Energy stocks were higher across the region on the stronger crude oil prices Wednesday. The oil price gains came on the back of data from the U.S. Department of Energy which showed that oil inventories unexpectedly plunged by 8.4 million barrels last week.

The Nymex September crude oil futures contract was down 21 cents from the New York close, at $72.21 per barrel on Globex. The October contract, which becomes the benchmark after September's expiry Thursday, was down 26 cents at $73.57 a barrel.

Japan's Inpex was up 2.0%, Japan Petroleum Exploration was up 1.5%, Woodside Petroleum was up 6.0% and Korea's SK Energy was up 1.1%. In China, Petrochina was 3.9% higher while Sinopec rose 2.1%.

Taiwan shares lost 0.9% on concerns about a likely cabinet reshuffle. Premier Liu Chao-shiuan said at a news conference Wednesday he would decide next month whether to reshuffle the cabinet and accept resignations submitted so far by the defense minister, cabinet secretary and vice foreign minister amid public outrage over the government's response to Typhoon Morakot.

"The reshuffle may include heads of financial and economic agencies and this leads people to consider whether the (financial and trade pacts) with China will be delayed," said Capital Securities Assistant Vice President Diana Wu.

In Tokyo, the focus was on stock plays with strong trading themes, as the overall market was expected to stay in a tight range, with little in the way of economic indicators on the horizon.

"Players expect that the Nikkei won't move much, so they are focusing instead on individual stocks with key trading themes like crude and swine flu," SMBC Friend Securities senior strategist Toshihiko Matsuno said.

Increased swine flu concerns lifted shares of Chugai Pharmaceutical, which sells Tamiflu in Japan, by 1.3%. All Nippon Airways had gained 3.7% on a ratings upgrade from Mitsubishi UFJ Securities.

In Australia, Brambles rose 5.9% after saying its fiscal year 2009 net profit fell 30% to US$452.6 million. That result was above the average forecast of US$426.3 million from four analysts surveyed by Dow Jones Newswires.

QBE Insurance was up 6.8% after it reported a record first half net profit, boosted by strong premium growth and recent acquisitions.

In New Zealand, transport company Mainfreight was 2.3% higher after releasing first quarter earnings. Its net profit fell sharply in the quarter, though the company was slightly more positive in its outlook.

In Korea, U.S. stocks' resilience was helping to stabilize sentiment. Banks were higher, led by KB Financial, up 4.3%.

Singapore's Straits Times Index gained 0.9% while Malaysia's Kuala Lumpur Composite Index rose 0.6% and Indonesia shares were 1.4% higher. In the Philippines, shares were down 1.5% after opening positive earlier and Thailand shares were 1.3% higher.

Foreign exchange markets were taking their cue from equities with the euro getting bid against the yen as the markets opened higher, fueling risk appetite. The single unit was buying Y134.11, compared with Y133.80 late in New York trade Wednesday. It was a little lower against the dollar at $1.4222 from $1.4233. The dollar was slightly stronger against the yen, at Y94.34 from Y94.00.

Japanese government bond futures were slightly higher as the market awaited clear signs of an overall macroeconomic recovery. "Until it becomes a bit clearer whether views are biased to the bullish or the bearish side on the question of sustainability, the yen bond market will likely hold in a range," said Barclays Capital strategist Chotaro Morita. Lead September futures were last up 0.02 point at 138.89 points after hitting a five-month high of 138.99 earlier. The 10-year yield was down 0.5 basis point at 1.335%.

Base metals were a little higher in light trade so far in Asia after the complex slid Wednesday.

Harbor Intelligence said copper was now in a seasonal consolidation phase and presented an opportunity for buying. It said inventory coverage for copper was insufficient; "this is a market with inventory coverage of less than one week, when demand in China is around all-time highs and the western world is just entering a new phase of growth with large re-stocking needs."

In Asia, LME three-month copper was at $6018.50 per ton, up $38.50 from the London kerb. Aluminum was at $1955 per ton, up $6.

Spot gold was at $941.60 per troy ounce, up 10 cents.