Investors refuse to flap over Argentina

ASIAN investors headed off for the Christmas break worrying about the impact of Argentina's suspension of debt repayments, but refusing to be panicked into unloading stock.

With the Tokyo market closed for a holiday, investors looked for inspiration to the mildly bullish sessions on Wall Street and Nasdaq ahead of the weekend, and most markets moved narrowly ahead.

While a wary eye was being kept on the developing drama in Argentina, most analysts were assuring institutional investors that the direct exposure in Asia was minimal, although the risk of market contagion was always present.

In Hong Kong, after two days of Argentina-related bashing which left HSBC Holdings down 5% last week, the shares made a partial recovery of HK$1 to HK$90.50.

Investors were reassured by reminders that the group had provided in June $338m (£235m) against its $590 million holding in Argentinian non-performing loans. Plans to expand its mainland network lifted cellphone operator China Unicom by more than 1%, providing some more impetus for the Hang Seng index, which was up by 46.91 points to 11,205.01.

In Taiwan, a leap in unemployment from 5.2% to a record 5.3% failed to deter bargain hunting among computer stocks following a government report that output would be boosted by Japanese and US companies turning to local manufacturers in order to cut costs. Laptop specialist Acer led gains in the sector with a 4% surge, and the Weighted Average responded with a gain of 69.52 to 5178.76, a rise of more than 1%, which made it the best performer in the region on the day.

After leading regional markets since the start of the year, South Korea was more subdued, and early gains were later pared, leaving the Kospi index a shade weaker, down 1.1 at 643.61.

The profit-taking would have had greater impact but for a 2.5% rise in Korean Telecom after the government sold a 3% stake in the company to Microsoft.

Trading in Singapore ended at midday with the Straits Times index marginally ahead, showing a rise of 4.6 points to 1581.33. The advance was led by electronics stocks, which had been heavily sold at the end of last week on renewed concerns about demand from US companies for components. Australian traders headed for the beaches leaving Sydney's All Ordinaries index close to a fivemonth high at 3328.7, up 14.6 points.

Growing confidence in an upswing in consumer demand in the US lifted News Corporation stocks in early trade, although gains were limited by reports of a large sale of shares by the Murdoch family trust. Trading was enlivened by proposals for a merger between Orogen Minerals, a nickel producer based in Papua New Guinea, and energy producer Oil Search. Orogen shares climbed more than 8% on news of the proposed deal, which would create an energy group valued at about £430 million, and Oil Search crammed on 7%.

Official denials of any re-pegging of the local currency against the US dollar helped to reassure investors in Malaysia, where the Kuala Lumpur Composite added 2.99 points to 668.04. Thailand's SET index strengthened 3.96 points to 300.65, while in Indonesia, the Jakarta Composite ghosted up 0.42 to 378.25.

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.