S&P's fails to dent Tokyo techs

JAPANESE investors shrugged off a further downgrading of the country's debt rating and piled into technology stocks on further signs of an imminent recovery in demand. Smaller tech stocks led the way as buyers looked for undervalued bargains, but in other Asian markets the big names grabbed attention.

The downgrading of Japan's credit rating from AA to AA minus by Standard & Poor's failed to deter buyers, and the Nikkei 225 closed up 209.36 points at 11,346.66. The downgrading, which reflected disappointment at the lack of movement on broad economic reforms and failure to solve the growing bad loans crises, had been telegraphed by warnings from ratings agencies earlier this year, said analysts.

Bank shares, which had slumped recently after the Financial Services Agency reported a 20% growth in bad debts, rallied, led by Mizuho Holdings which gained 1.4%. Chipmakers around the region were lifted by overnight reports of growing order books for Texas Instruments and semiconductor manufacturer Novellus.

While equipment makers Tokyo Electronic and Adventest responded well with gains of 3%, the star performer was Ebara, a little-known supplier of computer components, which gained 9%.

Trading was slowed as many investors stood back ahead of key earnings reports from the US and Japan. Chip giant Intel reports today and next week Japan's Sony and Toshiba are set to report figures that will be studied for clues to the prospects for tech companies this year.

South Korea's big player and world memory-chip leader, Samsung Electronics, reports on Friday and hopes of good figures took the recently-strong stock up 1%. The tech-effect was muted by weakness among banks and the Kospi index gained 6.28 at 900.56.

While Taiwan's normally-ebullient tech stocks were largely unchanged, old-economy counters moved ahead on hopes of an economic upturn, and the Weighted Average gained 39.21 points to 6235.21.

Strong bidding at a government land auction in Hong Kong on Monday, which indicated that developers were regaining their confidence in the market, failed to impress investors. But Hang Seng index gained strength late in the session, rising 60.5 points to 10,788.5. Property stocks slipped slightly as analysts said that until the secondary market begins to show signs of recovery, the outlook for future sales and profits remains grim.

Australian investors continued to celebrate the recent resilience of their economy and steady buying of blue-chips among banks, retailers and resources stocks sent the All Ordinaries up. It later retraced to close unchanged at 3319.6.

In Singapore, buyers for tech stocks and Singapore Airlines took the Straits Times index up 4.4 points to 1761.9. The bull run on the Kuala Lumpur Composite ran out of breath, and the index drifted off 3.17 points to 781.37. The Jakarta Composite stayed strong with a 4.52 gain to 554.35, and Thailand's SET index edged up 1.68 to 379.63.

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