HONG KONG - ASIAN stocks rose cautiously on Friday as the dollar steadied against the yen and oil prices hovered below record highs, offering a rare lull in the market's gyrations.

Most stock markets across Asia were modestly higher, but Sydney's main index surged back towards the 6,000 mark, last glimpsed in February, as top miner BHP Billiton jumped, propelled by speculation of Chinese interest in the firm.

Global stocks festered at the start of this year as worries about the credit crisis and the state of the US economy corroded profits and rattled banks. But Wall Street's fear has subsided and Thursday brought the CBOE Volatility Index to its lowest close since October and the S&P 500 and Nasdaq to their highest closing levels since early January.

KUALA LUMPUR
At 12.59pm Singapore time, the Kuala Lumpur Composite Index (KLCI) rose 7.81 points, or 0.60 per cent at 1,301.96.

HONGKONG
As of 1.17pm Singapore time, share prices finished Friday morning up 0.63 per cent, taking their cue from Wall Street's continued rally overnight after oil prices pulled back from their highs, dealers said.

The Hang Seng index closed the morning up 161.80 points at 25,67.51, off a low of 25,533.60 and a high of 25,748.33. Turnover was HK$46.56 billion (S$8.23 billion).

Select large caps including HSBC, China Mobile and PetroChina contributed to a big chunk of the index's gains.

PetroChina surged nearly 3.8 per cent after a report that the Chinese government may raise the threshold for windfall taxes on domestic crude oil production.

Cheung Kong climbed over 3 per cent after Citigroup raised its target price to HK$140.81 from HK$134.19, factoring in higher valuation for unit Hutchison Whampoa.

Sun Hung Kai Properties also came under selling pressure after chairman and chief executive Walter Kwok obtained an injunction to prevent the company's board from meeting to vote on his removal.

SHANGHAI
Chinese share prices ended slightly down in Friday morning trade, with power firms leading losses, as investors booked profits after a sharp rise in the previous session, dealers said.

The benchmark Shanghai Composite Index, which covers A and B shares, shed 3.25 points or 0.09 per cent to 3,634.08.

'Speculative profit-taking prevailed as investors remained cautious because of high inflation,' said Mr Chen Huiqin, an analyst at Huatai Securities.

Meanwhile, banking issues turned higher despite concerns about a massive 13.24 billion A shares in Bank of Communications becoming freely tradable following the end of a lockup period.

'Banks' strong performance is essential for an overall rebound in the domestic stock market,' Mr Chen added.

The Shanghai A-share index tumbled 3.30 points or 0.09 per cent to 3,813.20 points, while the Shenzhen A-share index fell 8.23 points or 0.69 per cent to 1,182.77.

TOKYO
At 10.09am Singapore time, Japan's Nikkei stock average rose 0.2 per cent, extending gains into a fifth day as stocks tracked overnight gains on Wall Street, led by exporters such as Honda Motor.

The market pared earlier gains as investors locked in profits, with the Nikkei dipping into negative territory at one point.

The benchmark Nikkei ended the morning up 21.97 points at 14,273.71. The broader Topix index rose 0.7 per cent to 1,402.23. -- REUTERS, AFP