HONG KONG - Asian stocks closed mostly up Wednesday after a drop in oil prices boosted sentiment, but the G8 industrial powers issued fresh warnings about threats to the global economy.

Indian and Chinese shares led the rise, jumping more than 4.5 percent and 3.7 percent respectively, but are still far below highs hit some months ago following a steep plunge this year.

Oil was trading around 138 dollars per barrel on Wednesday, sharply lower than recent all-time highs around 147 dollars. That allayed some concerns about surging global inflation, which threatens slower economic growth.

But the cost of oil, food and other commodities still remains high by historical standards, and the Group of Eight (G8) rich nations warned again Wednesday about the threat that posed to the global economy.

The leaders of the G8 nations said in their communique after a summit in Japan that they had "agreed on the need to address" rising oil and food prices and global inflationary pressures.

Elsewhere in Asia on Wednesday, Hong Kong shares rallied nearly three percent, Australia was up 1.6 percent and Singapore ended just over one percent higher.

The Japanese stock market edged up 0.15 percent. The country's core machinery orders were unexpectedly strong in May, but experts warned that had failed to dispel gloom about prospects for Asia's largest economy.

Taiwanese stocks closed little changed, but the South Korean bourse fell nearly one percent. Among smaller Asian markets, Malaysia, Indonesia, the Philippines and New Zealand were up, but Thai stocks closed down.

Asian stocks were helped by a Wall Street rally Tuesday and comments by Ben Bernanke, the head of the US central bank, indicating continued steps to deal with a credit crunch after a financial crisis.

But investor sentiment could be hit over the rest of the week after Iran on Wednesday test-fired a missile it said was capable of reaching Israel. The test angered the US as fears grow that a standoff over the contested Iranian nuclear drive could lead to war.

 TOKYO: Japanese shares closed 0.15 percent higher as Wall Street rallied on lower oil prices, but dealers said reports of an Iranian missile test could weigh on market sentiment.

The Tokyo Stock Exchange's benchmark Nikkei-225 index firmed 19.03 points to end at 13,052.13. The broader Topix index of all first-section shares gained 2.02 points or 0.16 percent to 1,285.53.

Wednesday's trading volume was estimated at 1.966 billion shares, below the 25-day moving average of 2.026 billion shares.

Iran on Wednesday reportedly test-fired its Shahab-3 missile, whose longer range puts Israel within reach, amid growing fears that a standoff over the contested Iranian nuclear drive could lead to war.

"The last week or so the Iranian issue has been hanging over the market. Today (Wednesday) they dashed any hopes that they'd be cooperative," said Darren Heathcote, head of precious metals trading at Investec Bank in Sydney.

An unexpectedly strong jump of more than ten percent in Japan's core machinery orders in May had limited impact on share prices. Mitsubishi UFJ Financial rose 2.2 percent to 955 yen and Sumitomo Mitsui Financial gained 3.2 percent to 796,000 yen.

Some major machinery makers also ended higher after the unexpectedly strong machinery orders. Fanuc advanced 1.0 percent to 9,560 yen while Okuma rose 1.7 percent to 958 yen.

HONG KONG: Hong Kong share prices closed up 2.8 percent, dealers said.

The benchmark Hang Seng Index finished 585.00 points higher, at 21,805.81. Turnover was 74.55 billion Hong Kong dollars (9.56 billion US).

"The market widely expects the Chinese government to introduce stabilisation measures to support the A-share market before the Olympics in August, which will boost Hong Kong shares as well," Peter Lai, a director at DBS Vickers, told Dow Jones Newswires.

China Merchants Bank ended 5.4 percent higher at 25.30 dollars and Industrial and Commercial Bank of China finished 5.1 percent higher at 5.40 dollars. HSBC was up 2.94 percent.

Cathay Pacific was up 4.91 percent and shipping firm Cosco Pacific jumped 5.26 percent, following a drop in crude oil prices overnight. China Mobile rose 1.5 percent to 104.20 dollars.

SHANGHAI: Chinese share prices closed 3.75 percent higher, dealers said. The benchmark Shanghai Composite Index, which covers both A and B shares, closed up 105.60 points at 2,920.55 on turnover of 105.8 billion yuan (15.4 billion US dollars).

"Any decline in oil prices will boost Chinese stocks because inflation is currently the foremost worry in investors' minds," Capital Securities' strategist Amy Lin told Dow Jones Newswires.

"Expectations of slower CPI growth in June ease concerns that the central bank will raise the interest rate again this month," said Ping An Securities' Li Xianming.

The Shanghai A-share index rose 3.76 percent to 3,063.57, while the Shenzhen A-share index was up 3.24 percent to 928.23.

China Vanke, the country's top property developer, was up 8.10 percent to 10.01 yuan. Industrial and Commercial Bank of China, the country's largest lender, gained 4.48 percent to 5.13 yuan.

China Life Insurance soared by the 10 percent daily limit to 25.17 yuan, and Ping An Insurance jumped 8.58 percent to 43.78.

China Petroleum Chemical Corp. (Sinopec) added 4.83 percent to 10.63 yuan. Air China added 2.16 percent to 10.39 yuan.

SINGAPORE: Singapore share prices closed 1.07 percent higher, dealers said.

The blue-chip Straits Times Index was 31.00 points firmer at 2,917.62. Volume totalled 1.14 billion shares worth 1.31 billion Singapore dollars (963 million US).

"Oil and commodity prices have topped out for now. An easing of inflation worries bodes well for equities," DBS Vickers brokerage said.

CapitaLand was four cents firmer at 5.82 Singapore dollars. DBS bank gained 36 cents to 18.84. Singapore Airlines put on 52 cents to 14.88.

KUALA LUMPUR: Malaysian share prices closed up 1.7 percent, dealers said.

The Kuala Lumpur Composite Index gained 18.56 points to 1,139.81. "Although volume is still low, today's market strength is encouraging. Hopefully, the momentum can continue tomorrow (Thursday)," a trader told Dow Jones Newswires.

Tenaga gained 5.2 percent at 8.15 ringgit and Genting added 6.5 percent at 5.70. Telekom rose 4.2 percent at 6.20 ringgit and top bank Maybank added 2.1 percent at 7.15.

 BANGKOK: Thai shares closed 0.19 percent lower, dealers said.

The Stock Exchange of Thailand (SET) composite index lost 1.37 points to close at 721.13 points, while the blue-chip SET-50 fell 1.51 points to close at 511.38.

"The Thai market rose in line with other regional markets in the morning," said Pongrat Ratanatavanananda, vice president at Bua Luang Securities. "But it closed down later because investors are still worried about political uncertainty in Thailand after the two court cases yesterday."

PTT rose 4.00 baht to close at 286.00 baht. Bangkok Bank was unchanged at 113.00. Thai Airways International edged up 0.20 to close at 17.20.

JAKARTA: Indonesian shares closed 0.3 percent higher, dealers said.

The Jakarta Composite Index gained 7.06 points to 2,286.03. "The market managed to finish in positive territory thanks to strong buying interest in telecom and banking stocks," said Teuku Hendry Andrean, analyst at Finan Corpindo Nusa.

Index heavyweight Telkom rose 1.4 percent to 7,400 rupiah, rival Indosat added 3.1 percent to 6,600 rupiah.