Glimpse of light in US eases slide

SIGNS of a recovery in the US economy put the brakes on the Asian stock market slide before Japanese computer maker NEC doubled its loss forecasts for the year.

NEC dived 3% before it warned losses for the year would be 300bn yen (£1.6bn) due to restructuring charges for a programme including some 14,000 job cuts. The economic slowdown has seen fewer companies invest in PCs, leading to a 155bn yen loss in the last quarter of 2001.

Tokyo stocks measured by the wide-ranging Topix index lifted off from recent near 17-year lows, and the Nikkei 225 narrowly broke back through 10,000 before it settled to 9997.80, up 78.32.

The grim outlook for NEC was underlined earlier this week when Fujitsu, which makes computers as well as microchips, unveiled big losses. Its shares slid 3%, taking losses this week to 11%.

The surprise 0.2% rise in American gross domestic product, against a forecast fall of 1%, reignited hopes that the US recovery is under way. The Fed's view that the outlook is now promising, although weakness is still a danger, also spurred the bulls into a gentle trot. The decision to leave interest rates unchanged after 11 cuts in 12 months had been widely telegraphed and discounted.

Rises in Japan were led by exporters and technology stocks linked to US consumer demand but gains were limited by domestic earnings concerns. Car makers provided most of the gains on continuing buoyant US auto sales. Toyota rose almost 2%, while Honda staged a more modest advance.

Wall Street's overnight gains saw Hong Kong stocks retrace in the morning session much of Wednesday's 2.3% slide as buyers moved in on stocks with big US exposure. HSBC Holdings, which had fallen sharply on concerns about provisions for bad loans in the US, rose HK$1 to HK$88 as investors looked instead at the improving outlook for its American branch banking business.

But the Hang Seng surrendered earlier gains to end the day off 31.7 at 10,725.3.

Wobbly trading in South Korea left the Kospi down 2.10 at 747.35. Foreign profit-taking outweighed the enthusiasm of local investors for computer counters, which lost early gains scored on hopes of rising sales in the US.

Taiwan chipmakers firmed after Nasdaq's 1.1% gain, taking the Weighted Average index up 54.88 to 5867.55. A 5% jump in stocks of VIA Technologies, Taiwan's largest semiconductor group, after better- than- expected earnings, provided a further boost to the rest of the sector.

Transport stocks grabbed the attention in Sydney, where the All Ordinaries rose 29.8 points to 3404. Toll Holdings rose 14% and Lang Corp soared 22% after winning a bid for the Freight Corporation and National Rail Corporation. Resources stocks moved sharply higher on renewed takeover talk in the sector.

Singapore's Straits Times index rose 31.3 points to 1786.9, while Malaysia's Kuala Lumpur Composite index added 5.81 to 715.81. Thailand's SET index advanced 2.11 to 342.51, as the Jakarta Composite jumped 4.83 to 449.26.

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