US retail rise cheers investors

THE mood swung towards cautious optimism in Asian stock markets today as strong overnight gains in US retail stocks offset last week's downbeat report on consumer confidence. Doubts about the longer-term economic trend took most of the conviction out of the rally in

Some investors were warily eyeing the 0.4% drop in the index of leading US indicators. This, the biggest fall in 10 months, added more fuel to the fears that the global economic trend is backwards. While Japanese exporters such as Sony, Toyota and Canon enjoyed support, other major blue-chips were marked down ahead of traditional seasonal selling of cross-holdings by the big banks.

After a solid start the Nikkei 225 Average drifted back for a 21.59 point gain at 9620.69. A forecast that the depression in the chip industry is bottoming out saw makers of semiconductor manufacturing equipment soaring by up to 7%. Sales are expected to rise more than 6% in the year to the end of March after declining 51% last year.

Hong Kong investors were fascinated by a rare commercial setback by the city's top tycoon, Li Ka-shing. Known as Superman for his ability to pull off shrewd deals, Li has tasted defeat in his Tom.com advertising group's bid to take a controlling stake in the local Asian Television broadcaster. Complaining that due diligence was not possible, Li abandoned the HK$290m (£24m) bid for a 32% stake in the company.

This put the spotlight on the rival Television Broadcasts, the dominant local channel, and its shares soared 16% in early trade, while the Hang Seng index piled on 161 points to 10,408.

Shares in exporters benefited from solid earnings figures from US retailers, including Toys R Us, which sources much of its stock through Hong Kong. Sentiment was also lifted by a smaller-than-expected rise in unemployment figures, from 7.7% to 7.8% in the three months to the end of July.

Signs that South Korea is regaining its place as the favourite North Asian home for foreign money saw the Kospi lead the region with a jump of more than 2% as it put on 17.22 to 734.80. After ignoring the Korean market last week, Western institutions snapped up major chip stocks as semiconductor prices on world markets showed signs of firming.

Taiwan stocks picked up speed after investment bank Morgan Stanley raised its forecast for gross domestic product growth this year from 2.3% to 3.3% on the back of robust domestic demand. The Weighted Average added 58.83 to 4946.83.

Sydney stocks maintained their recent cracking pace, adding more than 1% in value as the All Ordinaries index put on 77.4 points to 3176.7. Recent market stars News Corp, BHP Billiton and Rio Tinto continued to shine in the wake of Wall Street, but trading in Qantas shares was halted amid reports of a cash-raising.

Singapore's Straits Times index added 0.2 to 1533.6, but Kuala Lumpur's Composite dropped 1.65 points to 734.89. Thai and Indonesian stocks were attracting foreign buyers again. The SET index rose 2.52 points to 372.73, while the Jakarta Composite gained 2.18 to 453.63.

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.