Nasdaq recovery fuels buying across Asia

HONG KONG -- A three-day buying spree among technology stocks in the United States has brought gains to several of Asia's leading equity markets.

Share prices in Australia, Korea, Japan, Hong Kong and Thailand were buoyed by high-tech stocks Friday, as investors bet that falling global interest rates would boost demand for electronics goods and computer components later in the year.

The buying came after the Nasdaq Composite in New York surged more than 4 percent Thursday as investors ignored some disappointing profit reports by leading high-tech companies.

The benchmark Dow Jones industrial average rose 0.05 per cent to at 10,609.55.

In Tokyo, the Nikkei index of 225 shares gained 1.11 percent, while in Australia the All Ordinaries gained 0.54 percent and in Seoul the Korea Composite Stock Index rose 4.64 percent on strong buying from offshore.

Meanwhile, Thailand's SET gained 3.6 percent amid buying of banking and electronics stocks.

Recession fears

The buying comes against a backdrop of falling U.S. economic growth, and warnings of a possible recession, which many analysts believe will crimp demand for exports from Asia.

Tokyo-listed stocks were lifted higher by consumer electronics companies such as Sony and NEC.

Earlier this week the Nikkei sank to its lowest close in 27 months, coming precariously close to its lowest level since the bursting of an asset price bubble in the early 1990s.

In Australia, the gains came mostly from rises by media giant News Corporation and leading telephone company Telstra, said a dealer at Salomon Smith Barney in Sydney.

"There was strong foreign demand for News and Telstra, which dominate the market here, and there has been a bit of rotation by investors out of the defensive stocks into the more speculative media and high-tech sectors," said the dealer.

Instead of bracing for a slump in exports from Asia, which relies heavily on the United States as a market for high-tech equipment, investors are looking at how regional governments and central banks will respond to the U.S. slowdown.

Interest rate cuts

Most observers expect further interest rate cuts in the U.S. to stimulate domestic demand and weaker currencies in Asia to reduce the price of exports.

Evidence of that came Friday in Japan, where the government gave a green light to reducing the value of the yen against the U.S. dollar to generate export growth.

In Hong Kong, investors lifted media and Internet stocks in line with their offshore counterparts "because they're becoming emboldened by the gains out of the U.S.," said ING Barings head of equity sales Dan Miller.

"The same can be applied to the markets in Taiwan, Japan and Korea, where there is a strong representation by personal computer makers, semi-conductor firms and telecommunications equipment suppliers," he added.

Among the key markets only Taiwan was weaker as investor caution took hold ahead of the forthcoming Chinese New Year holidays. The key TAIEX fell 0.56 per cent to close at 5369.24.

Reuters contributed to this report.

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