US fears slow down recovery

ASIAN share prices today began the hard slog back up the cliff they fell off last week, but investors were wary ahead of Wall Street's reaction to Qwest Communications' weekend admission of improper accounting.

Japanese and Hong Kong markets showed the strongest gains as they added more than 1% in early trade, but Tokyo's advance was cut back by further signs of a glitch in the country's economic recovery.

In Tokyo the Nikkei Average added 75.64 points to close at 9666.67 but there was some disappointment that industrial output slowed dramatically last month after gaining

4.1% in May. June output fell 0.7% month on month but the government said it expected output to grow by between 1.6% and 1.8% in July and August.

Bolder investors were betting that the worst of the Wall Street slide may be over, as consumer confidence continues to hold up. The July sentiment index compiled by the University of Michigan showed consumers were much more bullish than most economists had expected, bolstering hopes that exports would accelerate again in the second half.

The sudden strength of the US dollar on foreign exchange markets added to optimism on exports, and shares in Sony, Canon, Nissan and Toyota bounced up by as much as 7%, Prospects for car exports were further lifted by a forecast from Toyota that sales would be 3.3% ahead of last year despite the yen's surge this year.

The US consumer confidence report pulled Hong Kong investors out of their funk, and the Hang Seng index gained 103.03 points to 9876.15. Gains were led by China mobile phone operators, battered last week, while oversold blue-chip property stocks were also in demand.

Bank of China Hong Kong shares climbed back toward their HK$8.50 offer price, with a rise of 15 cents to HK$8.45 after the company was included in the Morgan Stanley Capital Index series.

Attention was centred on the chaos among Hong Kong's penny stocks as the exchange backed down on its proposals last week to de-list half the rarely-traded counters, sparking outrage.

Investors in South Korea swooped on chip-makers in search of bargains after recent heavy losses, and their enthusiasm was further fired up by a government forecast of stronger demand in the second half which would double exports.

Elsewhere, however, growing doubts about the recent re-rating of old-economy companies saw a big fall in the stock of Posco, the country's major steel producer, and the gain on the Kospi index was limited to 1.51 at 699.35.

Investors in Taiwan shared none of the Korean appetite for chip stocks following Taiwan Semiconductor's recent warnings about earnings, and the Weighted Average fell 3.51 points to 4851.83.

In Sydney, the possibility that Rupert Murdoch will be allowed to bid for Britain's Channel 5 lifted News Corporation stock by almost 4%, ending a recent dismal dive and helping the All Ordinaries index up 43.1 points to 2984.2 at the close.

South East Asian markets perked up. Singapore's Straits Times index was 10.11 points ahead at 1504.79, Malaysia's Kuala Lumpur Composite 1.65 up at 719.36, Thailand's SET index 2.59 points better at 369.06 and Indonesia's Jakarta Composite 3.33 stronger at 445.21.

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