Asia watch

THE TALIBAN'S retreat from Kabul was the signal for an advance in Asian markets. Investors moved in on hopes that the Afghanistan campaign will not become a debilitating struggle through the winter, and that the threat of a global economic backlash has receded.

Taking their cue from the overnight strength on Wall Street and Nasdaq, investors pounced on blue-chip exporters, while electronics stocks bounded ahead on brightening prospects for sales and prices, taking markets in South Korea and Taiwan up by about 3%.

An early surge in Tokyo which took the Nikkei 225 Average up through 10,230 was later pared by continuing concerns over bad bank loans, and it slipped back to 10,086.76, a gain of 56.2 points. Institutional investors were also wary after a rise in current account figures was taken as an indication that imports were falling on weakening economic prospects, rather than reflecting a surge.

Optimism that the end of the war was in sight inspired heavy buying of Hong Kong stocks, which boosted the Hang Seng index by 287.2 points to 10,950. Telecoms stocks led the charge, and mainland cellphone operator China Mobile, in which Vodafone has a 2% stake, was ahead by 4%. Hutchison Whampoa, which owns 3% of Vodafone, added nearly 3% following warm reaction to the British phone giant's figures on Tuesday.

Predictions that microchip prices and sales have bottomed, vastly improving the profit prospects for Asian semiconductor manufacturers, continued to gain ground in South Korea and Taiwan.

An 11% leap in the price of 128-megabit DRAM chips translated into sharp gains among the big manufacturers, which gave Seoul shares their fifth consecutive day of gains, and the Kospi index put on a further 3%, rising 15.27 points to 604.1. Local buyers pounced on Hynix Semiconductor in the belief that it was oversold, despite its appalling debts, and the stock added 9%, while institutional investors preferred the more solid Samsung Electronics, which rose more than 5%.

Similar sentiments prevailed in Taiwan, where the Weighted Average index soared 141.16 points to 4277.7, lifted also by the country's admission to the World Trade Organisation at the weekend.

Sydney stocks continued to test levels not seen since the end of August. Optimism that the US and global economies were approaching the bottom of the trough lifted stocks cross the board, and the All Ordinaries index rose 111.9 to 3336.8. Wall Street's rise sparked demand for News Corporation shares, which added more than 3%. Improving prospects for metal and mineral producers sent miners sharply higher. Advances of up to 4% by market leaders BHP Billiton and Rio Tinto were underpinned by takeover prospects following the start of talks on a deal between WMC and the US Alcoa group.

Markets in Singapore and Malaysia were closed for public holidays, and in quiet trading Thailand's SET index was virtually static at 270.37, down 0.17. Indonesian stocks advanced on hopes that the Taliban retreat will ease tensions among local militant Muslim groups, and the Jakarta Composite climbed 3.52 points to 372.77.

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.