Nikkei investors lose their nerve

AFTER a four-day sprint which took

Further powerful gains on Wall Street and Nasdaq continued to fuel enthusiasm for technology stocks, while in Hong Kong buyers flocked to HSBC Holdings and property, and catapulted the Hang Seng index up 281.7 points to 10,985.8.

After testing an early six-month high, Tokyo stocks fell on concerns that prices had come too far, too fast, and the Nikkei 225 eased 101.77 points to close at 11,348.45. Promises from senior politicians of further anti-deflationary measures this month were countered by a survey showing that businessmen's confidence remained low. Despite growing evidence that the US economy is recovery, 90% of executives polled by the Nihon Keizai Shimbun do not expect Japan to hit the bottom until the end of this year at the earliest.

Star performer in Tokyo was Casio Computer, which surged almost 12% on reports that it was ready to launch a fuel cell for lap-tops, mobile phones and other devices that would last at least four times as long as conventional batteries. Rising confidence that the banks will tackle their bad loans problem sparked heavy gains among major lenders, led by Mizuho Holdings, which climbed 7% for a two-day gain of 21%.

Bank stocks were also prominent in Hong Kong, and HSBC Holdings rose 3.5% to a two-month high of HK$91 as buyers judged that last year's 18% fall in net profits showed that all the bad news was in the price. Group chief executive Keith Whitson's warning of another tough year was ignored as Goldman Sachs put up the 'buy' signal, and predicted that the price would hit HK$100 this year.

Hong Kong investors refused to be deterred by expectations of a tough annual budget on Wednesday, and moved in on property stocks after the government said land sales would be limited this year.

The 3.1% surge on Nasdaq in the face of a profits warning from the Oracle software giant encouraged more buying of the tech-laced markets of South Korea and Taiwan. Warm words from Chinese Premier Zhu Rongji about the need for transport links between the mainland and Taiwan lifted shares of shipping companies and airlines, but it was the semiconductor sector that provided most of the energy, as gains reached 5%. The Weighted index advanced 83.27 points to 5957.75. South Korea's reaction was less ebullient, but a rise of more than 2% by Samsung Electronics helped the Kospi index gain 3.63 points to 837.84.

Chip-related issues rescued Singapore's Straits Times index from early losses prompted by fears for the local economy, and it ended off just 1.8 at 1806.3. Stronger copper prices lifted resource stocks in Sydney, and the All Ordinaries index added 66 points to 3435.6.

A favourable re-rating of Malaysia by Standard & Poor's kept momentum going in Kuala Lumpur, and the Composite index put on 10.51 points to 735.41. Thailand's recent climb levelled out, leaving the SET index up by 0.66 points at 391.66, while in Indonesia the Jakarta Composite gained 3.5 points to 458.69.

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