Asian stocks eke out gains by noon

Japan's Nikkei was coming back in afternoon trade, after ending Monday at its worst close since December 1984

By staff and wire reports

HONG KONG, China -- Asian stocks were showing narrow gains after morning trade on Tuesday.

Japan's Nikkei index closed the morning session down 0.2 percent at 11,235.74. That's after it ended Monday at its worst level since December 1984.

But the index was turning around as afternoon trade got underway, up 0.1 percent at 12,271.42.

Australia was trading up in the afternoon, with the benchmark S&P ASX/200 rising 0.6 percent to 3309.8 points by early afternoon.

New Zealand was up 0.2 percent. Hong Kong also eked out a gain by the break after the morning session.

But markets were off in Taiwan and South Korea.

Techs rallying in Tokyo

In Japan, a 0.8 percent rise in the Dow Jones industrial average overnight and the likelihood of a U.S. interest rate cut wasn't enough to offset ongoing worries about earnings in Japan.

But Japan Telecom was up after falling for four straight sessions. It was up 8 percent in afternoon trade.

The stock has taken a beating after reports surfaced that Vodaphone is planning to reduce its stake in the carrier. Vodaphone has denied the report.

Toshiba bounced off a four-month low to rise 1.25 percent to 568 yen at the noon break. Japan's largest chip maker got a boost from Nasdaq's 0.8 percent overnight rise.

That filtered through to Matsushita Communication Industrial Co., too. Japan's largest cell-phone maker climbed 3.2 percent to 4,160 yen.

It is set to announce a deal later today that it will cooperate with chip-and-computer maker NEC on wireless technology.

NEC, which is also Japan's No. 2 cell-phone maker, was off 0.7 percent at 1,594 yen.

Chip and computer maker Fujitsu continues to gain from its restructuring plans. The company announced Monday it would trim 16,400 employees worldwide, around 9 percent of its work force.

Fujitsu saw its stock rise 1.9 percent to 1,268 yen, after a 2.8 percent jump on Monday.

The broader Topix index was up 0.04 percent at 1,155.64 at the noon break. It was pushing north in afternoon trade, up 0.2 percent.

Sydney showing cautious gains

Sydney stocks were moving up with cautious gains. The market's biggest stock, media giant News Corp., was up 41 cents to A$17.02 early afternoon after a string of declines.

All four major banks were up by early afternoon. Heading the charge was No. 2 Commonwealth Bank of Australia, which climbed 18 cents to touch a four-week high of A$31.68, before easing slightly. It reports earnings Wednesday.

Mining company Rio Tinto added 67 cents to A$31.92.

But BHP Billiton fell seven cents to A$9.06 after reporting flat profits on Monday.

In Hong Kong, the benchmark Hang Seng Index was up 0.2 percent at 11,483.44 by the midday break. Trading was light at.

Hong Kong blue chips were narrowly up, aided by a slight rebound in battered China telecom stocks.

But trading company Li & Fung fell 16.74 percent to HK$9.70 after it posted weaker-than-expected first half earnings.

Investors in Hong Kong's U.S.-linked market are watching for the Fed move later Tuesday. The Fed is expected to trim short-term interest rates a quarter of a percentage point.

Korean growth disappointing

In Seoul, stocks were down by midday. The benchmark Kospi gave up 0.3 percent at 565.27.

Troubled chip maker Hynix Semiconductor was the heaviest-traded stock, up 1.3 percent to 1,545 won on hopes of a debt-equity restructuring.

Its main creditor, Korea Exchange Bank, lost 1.5 percent to 3,030 won.

Korea's downturn intensified in the afternoon. The Kospi was down 0.45 percent shortly after South Korea released disappointing second-quarter growth figures.

The economy grew 2.7 percent through June, the worst quarterly growth since 1999. The Bank of Korea, which had expected 3.3 percent growth, attributed the slowdown to weak exports and a decrease in capital investment. In Taiwan, the benchmark Taiex was down 0.4 percent at 4,533.82 in afternoon trading.

Investors were also watching for the Fed move in Taipei, where bank stocks were rising slightly in anticipation.

Reuters contributed to this report.