Investors bet on fading bear market

SHARE prices in Asia set off in pursuit of the US overnight rally, but failed to match the 5%-plus gain on Wall Street and Nasdaq.

Buyers around the region are betting that recent rebounds in American stocks are the beginning of the end of the bear market, and that rising share prices will boost the confidence of US consumers. This will be good for their exporters of electronics, cars and other gadgetry.

In Tokyo the Nikkei 225 jumped almost 3.5% with a gain of 337.05 points to close at 10,003.72 after the Japanese indicator regained an early break through the widely-watched 10,000 level.

Hong Kong's Hang Seng index pushed straight through the benchmark figure with a surge of 179.26 points to close at 10,155.25.

Investors were also counting on stronger US share prices to shore up the dollar as overseas selling is reversed. The theory is backed by three days of gains by the greenback against the yen and other Asian currencies.

Signs of higher earnings for companies in the Standard & Poor's 500 index were another booster, as the threat of earnings scandals is also seen to be receding after US government action.

Japan's rise was led by motor exporters, who are predicting record sales and earnings this year despite the strength of the yen. Nissan, due to announce a new 'Z' model today, grabbed attention with an 8% vault, while Honda's record first-quarter profits yesterday boosted the shares more than 2%.

The rally in Japan came too late to save the flotation of government-controlled Japan Tobacco. Fearing such a thick tranche of stock would damage the market, the Ministry of Finance is reported to have put the issue back indefinitely. Hong Kong's recent record flotation, Bank of China Hong Kong, finally scrambled back to its HK$8.50 issue price after having been knocked down to as low as HK$8 since its launch last week.

Other banks also strengthened , and bargain hunters swooped on HSBC Holdings, boosting the price HK$2 to HK$88.75. Shares in the Hutchison Whampoa conglomerate rose 2.5% after it confirmed plans to launch its 3G telephone services in Britain and Italy in October.

Nasdaq's surge and a 6% gain on the Philadelphia Semiconductor index fired up chip stocks in South Korea and Taiwan. The Kospi index was catapulted 25.15 points to 725.5 as Samsung Electronics, the world's largest chip group, gained 4%.

Two days of pain for Taiwan Semiconductor came to an end as the stock recovered almost 4%, and the Weighted Average rallied 123 points to 4981.44. Ebullient electronics in Singapore-took the Straits Times index up 21.6 points to 1527.96.

Sydney stocks rallied for a second day running as Wall Street sentiment fed through to Australian blue-chips, and the All Ordinaries index put on 46.3 points to close the day at 3030.5. Resource stocks were among the leaders on hardening commodity prices.

A 2.5% gain put Indonesia ahead of South East Asian markets and the Jakarta Composite put on 12.02 points at 467.11, while Thailand's SET index added 7.8 points at 374.28, and Malaysia's Kuala Lumpur Composite was 6.27 points higher at 727.25.

Prices and indices in this report are from various sources and calculated at different times and may not always match those listed elsewhere on the site.