Asia watch

ANOTHER downgrading of

Moody's joined Standard & Poor's and Fitch ICBA in slicing a notch off its rating of Japan's sovereign debt to AA3, but relief that the agency had not been more harsh left the Nikkei 225 Average up 82.03 points at 10,452.65 at the close. Moody's followed the other agencies in condemning the government for its lack of action over the country's huge debt, which is likely to rise on defaulting loans to Enron.

Major banks tried to defuse the extent of their exposure to Enron by claiming that the impact of bad loans would not require any revision of already grim profit forecasts for the year to next March. This failed to halt the continued stampede out of bank stocks which saw market leader Mizuho Holdings stumble more than 5%. Sumitomo Mitsui, which has outstanding loans of about £150m, was harder hit, tumbling 8%, and Mitsubishi Tokyo, with almost £200m owing, fell by more than 3%.

Japan's third-largest broker, Nikko Cordial, plunged 7% after being put on credit watch by Standard & Poor's because of the amount of Enron bonds held by its asset management companies.

After being hit overnight by Enron concerns and its exposure to Argentina, HSBC Holdings found friends in Hong Kong. The stock was steady at $93.35, but was left behind by other blue-chip stocks as brokers predicted a flight to quality after the Enron collapse. The Hang Seng index more than recouped Monday's losses, gaining 272.1 points to 11,427.3. Credit for much of the rise was due to China Mobile, which jumped more than 2% on news that it is buying up more cellphone networks from its mainland parent.

South Korean technology stocks were lifted by news that the troubled Hynix Semiconductor group was discussing links with the US Micron giant, which might eventually lead to a form of merger. Hynix shares shot up by the daily limit of 15%, despite warnings from analysts that Hynix's bad debt problems could be a major obstacle. The news also helped local banks, but the overall effect on the Kospi was limited to a gain of 1.01 points to 651.67.

Hopes of higher chip prices lifted Taiwan's market, which was still benefiting from the weekend's election results, and the Weighted Average climbed 111.01 points to 4757.62. Signs that Singapore's moribund property market was picking up boosted the sector, and powered the Straits Times index up 39.6 points to 1533.9.

Sydney stocks circled listlessly ahead of an expected cut in interest rates on Wednesday. The main excitement came from resources giant BHP Billiton, whose stock jumped by about 2% after news that it had struck oil off Trinidad. The All Ordinaries index rose 55.7 to 3324.3.

Malaysian stocks were little changed, the Kuala Lumpur Composite adding 0.69 points to 644.04, while Thailand's SET index crept up 0.41 points to 302.61, and Indonesia's Jakarta Composite drifted down 2.80 points to 378.

Prices and indices in this section are supplied from various sources and calculated at different times and may not always match those listed on the site.