Bargain-hunt boosts the Nikkei

JAPANESE stocks rebounded today as an overnight surge in US markets unleashed a powerful wave of bargain-hunting after recent heavy losses. The response to the 2.2% rise on Wall Street, and 3.2% advance on the Nasdaq was more muted in other Asian markets as concerns over the strength of the global economic recovery held back investors.

Japanese stocks ended a four-day slide that had sliced 7% off the market's value, the Nikkei 225 Average closing at 10,839.93, up 175.82 points.

The recent slide in Japanese e stocks had uncovered value, Morgan Stanley said today. After raising questions about the country's economic recovery last week, the bank's analysts now say they prefer Tokyo stocks to those in the US.

Global strategist Robert Pelosky has raised his rating of Japanese stocks from underweight to neutral, and recommends investors switch away from 'tarnished' American markets. Similar sentiments from Goldman Sachs caused buyers to target Japan's major technology counters, which were also benefiting from the heavy gains on Nasdaq. Advantest and Tokyo Electron both surged more than 3.5%.

Investors' spirits were raised today by Economics Minister Heizo Takenaka, who said the Japanese economy was on the road to recovery. Recent private-sector forecasts were running ahead of the government's own predictions of zero growth this year, which suggested that confidence was now being rebuilt, he said.

The Nasdaq effect on technology stocks in the rest of the region was bolstered by widespread buy recommendations from analysts at Salomon Smith Barney today. Leading Asia guru Ajay Capur told a conference that this was no time for timidity, and the long-term outlook for the region's technology manufacturers was bright, while valuations were historically low. The global economic recovery would increase capital expenditure and benefit Asia's component suppliers as US companies continued to outsource their production, predicted Capur.

This helped to put recently battered South Korean technology stocks back on the road to convalescence, and the Kospi index, which fell more than 1.5% on Monday, rallied 1.3% in early trading. Gains were pared back to leave the index up 3.68 points at 812.84.

Taiwanese chipmakers also responded strongly to the forecasts, although this was balanced by profit-taking in financial stocks, and the Weighted Average index dipped 19.76 points to 5518.05.

Singapore investors, reeling from a slide in the Straits Times index lasting nearly a month, took heart and moved in on computer-related counters. The index rallied by 12.02 points to 1609.81. Wall Street was the engine that pulled Hong Kong stocks ahead, led by HSBC Holdings which regained HK$1.75 to HK$91, and the Hang Seng index responded with a rise of 39.99 points to 10,872.25, its first gain in five days.

In Sydney, investors followed up on Wall Street's rise by buying News Corporation and resource stocks, and the All Ordinaries index added 10.3 points at 3261.5.

While Malaysia's Kuala Lumpur Composite index scored a narrow rise of 0.78 points at 747.57, the SET index in Thailand slipped 0.31 to 417.08, and Indonesia's Jakarta Composite index weakened 0.2 to 544.32.

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