Australian energy giant Santos surged more than 20 percent at one point Thursday after rejecting a multi-billion-dollar takeover bid the company called "opportunistic", giving a lift to other Sydney-listed energy firms.
But ongoing worries about the effect of China's growth troubles on the global economy kept regional stock markets on edge with warnings of further volatility ahead.
Increasing confidence that the Federal Reserve will put off an interest rate hike until the new year continued to lend broad support to emerging market currencies.
Santos, Australia's third biggest oil and gas firm, flatly rejected the Aus$7.1 billion ($5.1 billion) bid from merchant bank and investment syndicate Scepter Partners, saying it was not interested.
Scepter, which manages money for Asian and Gulf-based royals, offered Aus$6.88 cash for each Santos share, a 26 percent premium on Wednesday's closing price.
But in a statement Santos said: "The proposal is considered to be opportunistic in nature and does not reflect the fair underlying asset value of the company."
News of the rejection sent shares in the firm soaring 20.6 percent to Aus$6.56 after opening in Sydney before easing slightly to sit 16 percent higher in early afternoon trade.
Santos has come under increasing pressure in the past year as the price of oil has plunged and its chief executive said he would step down, leading it to announce a review of its operations.
Despite Thursday's gains, the stock is still down by about half compared to last October.
"Santos is clearly ripe for the picking," said Evan Lucas, a market strategist at IG Ltd in Melbourne.
"I don't think the board will see any price sub-Aus$10 as fair value considering Gladstone is now up and running," he added, referring to a new liquefied natural gas venture in Australia.
- 'More volatility' -
The rally in Santos was reflected in other Sydney-listed energy stocks, with Origin up more than four percent, Beach Energy gaining 4.7 percent and Woodside clocking a 0.4 percent increase.
The gains helped Sydney's S&P 200 index edge up 0.15 percent, although worries about the global outlook continue to frustrate investors across world markets.
Tokyo was marginally higher by lunch and Hong Kong lost 0.77 percent in the morning after a public holiday, while Seoul shed 0.28 percent.
Shanghai dipped 0.10 percent, extending Wednesday's more than three percent loss on profit-taking after rallying about 12 percent this month.
Global markets suffered their worst quarter in four years in July-September with equities currencies seeing wild fluctuations, exacerbated by China's shock devaluation of the yuan in August.
While they have enjoyed a positive past three weeks as dealers bet on the Fed holding off a rate hike, data showing China's economy grew at its slowest pace in the third quarter since the global financial crisis rattled confidence.
"I'm finding it hard to get bullish, especially after the run-up we've had," said Mark Lister, head of private wealth research at Craigs Investment Partners in Wellington.
"I see more risks than opportunities. I'm pretty cautious on China and the emerging world and there's more to come there in terms of pain and volatility."
On currency markets, the dollar retreated against most emerging currencies.
Indonesia's rupiah gained 0.75 percent and the Malaysian ringgit was up 0.10 percent, while the Thai baht added 0.26 percent and the Singapore dollar put on 0.15 percent. The Australian dollar was 0.31 percent higher.
However, nervousness kept a lid on South Korea's won, which eased 0.31 percent.