The bank bulls win in Tokyo tug-of-war

A TUG-OF-WAR between buyers of Japanese banks and sellers of technology stocks ended with the bank bulls in charge in

A bout of profit-taking following last week's late gains among semiconductor and other technology stocks took an early toll on the Nikkei 225 Average before bank stocks took up the running on expectations of a government bailout of the struggling sector.

Worries that the recent run-up had been overdone sent early shivers through stocks of chipmakers in other markets, but the bulls stood firm and prices began to recover.

The net gain of 70.87 points to 10,942.36 on the Nikkei 225 reflected strong performance by banks on weekend reports that the government had earmarked five trillion yen (£82bn) to boost the balances of the Deposit Insurance Corporation, which underwrites banks facing serious financial problems. This offset fears that the expiry of a government guarantee on bank loans on 1 April will start the banking dominoes falling. Prime Minister Junichiro Koizumi has warned that the guarantee will not be renewed, but his pledge that the government would step in during a crisis was confirmed by senior ministers over the weekend.

Bank stocks soared by as much as 6.5% as fears of a disastrous collapse among smaller banks pulling down the market leaders brought buyers back in.

The overall impact on the Nikkei was limited by profit-taking in major electronic-related counters. Toshiba was the biggest faller - down 3.6% - after its record rise of 12% on Friday.

Hong Kong stocks continued their surge of last week with a gain of nearly 2% as analysts predicted that the Hang Seng index was set to break 12,000. While the technology game was still being played elsewhere in the region, Hong Kong investors switched to what they know best - property.

A good weekend for new apartment sales lifted major developers, led by Cheung Kong, which jumped 2.5%, and helped the Hang Seng to a gain of 145.67 points at 11,847.82.

After early sharp losses on profit-taking, Taiwan technology counters were soon making the running once again, and powered the Weighted Average index up by more than 3%. Heavy buying from overseas institutions returning to business after the New Year holiday centred on market leaders such as Taiwan Semiconductor, and the index added 178.07 points to 5816.6, for a year-to-date gain of 5%.

The recent hectic pace in South Korea slowed, but despite early losses on profit-taking the Kospi refused to stay down after a seven-day climb, and managed a gain of 6.45 points to 754.17.

Growing belief in a tech recovery was also spurring Singapore investors, who pushed the Straits Times index up 21.86 points to 1700.53.

News Corporation continued to be Australia's proxy for a US recovery and gained almost 2%, buoying the All Ordinaries index 11 points to 3385.3.

Malaysian stocks narrowly failed to breach the 700 level as the Kuala Lumpur Composite rose 6.43 points to 699.9. Thailand's SET index added 3.14 to 318.87, while in Indonesia, the Jakarta Composite was up 1.04 points at 386.24.

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.