Fed rate worries trouble Tokyo

MOST Asian markets started the week in bubbly mood after figures released on Friday pointed to growing consumer spending and higher factory output in the US.

Japanese investors failed to share in the optimism, as they worried that indications of an interest rate rise in the US later this year will emerge from the Federal Reserve's Open Market Committee meeting, which starts on Tuesday. In thin trade the Nikkei 225 Average shed 149.63 points to 11,498.38.

Stocks of Japanese car makers accelerated but an unexpected weakness in domestic sales of personal computers hit big manufacturers, led by Sony. Its shares fell 2.5% after an industry survey showed PC sales down 16% in the first week of March.

In Hong Kong, mainland cellphone operator China Mobile unveiled surprisingly strong profit growth of 55% last year, which boosted its shares almost 2%, helping to lift the Hang Seng 20.4 to 11,230.6. Fears that increasing competition would cut average revenues per user, which have sliced more than 7% off China Mobile's price this year, proved accurate but the overall results were ahead of analysts' forecasts.

US recovery hopes also boosted local exporters, while HSBC Holdings rose 1% on expectations that it will benefit from an uplift in its big American interests.

Positive signs that US chip giant Micron was close to clinching a deal to buy the memory business of Hynix lifted shares in Korean banks, which are owed large amounts by the ailing semiconductor group. Creditor banks were reported to have reached a deal in principle to support the US bid, which would create the largest chipmaking company in the world.

While Hynix shares slipped 7%, its leading lender, Korea Exchange Bank, jumped 6% and the Kospi responded with its sixth consecutive day of gains, up 9.26 to 869.62.

The prospect of a new chip giant emerging left investors in Taiwan with mixed feelings. Increased competition would be bad for its semiconductor makers but they also pondered the possibility of Micron cutting surplus production of standard Dram chips, which would lift prices. Tentative buying of technology stocks in Taiwan eventually left the Weighted Average up a modest 14.44 at 5965.89.

Singapore investors continued to put their faith in Uncle Sam delivering the goods this year, and the Straits Times index added 7.5 to 1785.5. Singapore Airlines shares climbed almost 2% after it reported improving load factors after a big decline that followed the 11 September terrorist attacks.

The brightening outlook for the global economy following the further signs of a return to growth in the US sent stocks in Sydney sharply higher. The All Ordinaries jumped 96.4 to 3453.1, led by a sharp 3.5% gain in shares of News Corp, which will benefit from a rise in consumer spending in America. Resources stocks were also strong as commodity prices continued to rise, and Rio Tinto shone out with a near-2% improvement.

Thai investors shrugged off better-than-forecast 1.6% gross domestic product growth in the third quarter and the SET index dipped 0.86 to 376.53. The Kuala Lumpur Composite rose 6.01 to 757.65 on recovery hopes but the Jakarta Composite drifted 2.27 to 465.72.

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.