Greenspan soothes the Nikkei

EVEN kind words from Alan Greenspan could not defend

Other Asian markets were more subdued as followers of technology stocks tried to balance a sharp fall in the first-quarter earnings of IBM against the company's more upbeat forecast for its second three months.

There were also mixed reactions to the Federal Reserve Board chairman's view that the strength of the US recovery was still uncertain. This was seen as good news for interest rates but put a question mark over the strength of an export-led recovery.

Greenspan was more positive about the outlook for Japan, when questioned in Congress. He reported signs of stabilisation as the US and European economies began to gather pace. 'To be sure, there has been a very serious deflationary problem in Japan but there are the first inklings that that is beginning to stabilise,' he said.

After three days of sharp gains, which had seen the Nikkei testing four-week highs, investors were in a mood to lock in some gains. Computer-related stocks, which had led the recent rally, took the brunt of selling with chipmaking equipment makers Advantest and Tokyo Electron down almost 2%.

The falls were partially offset by the strength of motor manufacturers, following good results from General Motors this week, and a strong buy call on Nissan Motors from Deutsche Bank analysts. Nissan shares, which have been benefiting from a major profits turnaround under the wing of the French Renault group, jumped almost 2%. Stores group Seiyu, in which US giant Wal-Mart has taken a strategic stake, continued to be pumped up on hopes of foreign magic being worked on profits, and soared almost 14%, as a string of better profits news from other retailers underpinned the prospects for the sector.

Hong Kong stocks held on to recent sharp gains as buying of computer-related issues offset profit-taking among other blue-chips, although selling was limited on expectations that there will be no early rise in US interest rates. The Hang Seng added 37.90 to 11,128.48 after Wednesday's late surge, which had spurred it on by 2.8%.

South Korean investors locked away some profits from the recent rise to record highs by Samsung Electronics, and the Kospi dipped 1.46 to 929.05.

Signs that buoyant sales of the new iMac model are reviving Apple's fortunes boosted shares of Taiwan's Quanta, which produces the machine, and the shares rose more than 1%, helping the Weighted Average to a 31.57 rise to 6422.25.

Singapore stocks failed to hold early gains, and the Straits Times index fell 13.22 points to 1758.12. Australian shares took comfort from Greenspan's views on the US economic recovery, and the All Ordinaries was lifted 5.6 points to 3356.2, with modest gains in News Corp and some resources stocks.

A forecast that Malaysia's economy will grow 4.5% this year failed to impress investors, and the Kuala Lumpur Composite drifted back 3.65 to 788.49. Thailand's SET was 0.73 up at 391.46. The Jakarta Composite slid 10.02 points to 532.25.

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