Tokyo leads Asian markets to higher close


A merger between Mitsubishi Electric and Hitachi gave Japan's sagging chip industry a much-needed boost

HONG KONG, China -- Most Asian markets finished higher Tuesday, led by Tokyo which soared as investors cheered reports of a shakeout in its chip industry.

The benchmark Nikkei 225 rose 294.44 points, or 2.56 percent, to 11,792.82, while the broader Topix closed up 24.65 points, or 2.27 percent, at 1,112.79.

In other markets, Seoul ended the day more than 2.3 percent higher on bargain hunting and Australia was lifted by strong banks and resources stocks.

Hong Kong remained flat ahead of Tuesday's U.S. Federal Reserve meeting, and Singapore was higher heading towards the close.

Bucking the trend was Taiwan, which dropped on concerns over weak corporate fundamentals.

In Tokyo, shares moved sharply higher after Mitsubishi Electric Corp and Hitachi announced plans to merge the bulk of their chip operations.

The move will create the world's third-largest chipmaker, and is expected to give Japan's ailing chip industry a lift.

Mitsubishi Electric jumped 12.67 percent to 596 yen, while Hitachi gained 7.9 percent to 983 yen.

Consumer electronics giant Sony Corp climbed 3.61 percent to 7,170 yen and rival Kyocera Corp rose 4.3 percent to 9,940 yen.

In the banking sector Mizuho Holdings dropped 0.31 percent to 323,000 yen, but Sumitomo Mitsui gained 1.4 percent to 580 yen.

Japan's leading carmaker, Toyota Motor, rose 2.89 percent to 3,920 yen and rival Honda Motor gained 2.91 percent to 5,660 yen.

Bargain hunting

Seoul shares posted their seventh day of gains to post a new 23-month high, as investors chased bank and tech shares.

The benchmark Kospi rose 2.33 percent to 889.98, while the over-the-counter Kosdaq inched up 0.87 percent at 92.58.

Display maker Samsung SDI Co jumped 8.23 percent to 96,000 won, while the Chohung Bank climbed 8.37 percent.

In Australia, shares edged just into positive territory on strength in banks and resources. But gains were limited as investors waited for direction on interest rates from the United States.

The benchmark S&P/ASX 200 index closed up 7.2 points, or 0.2 percent, at 3,460.3 .

Media giant News Corp fell 1.6 percent to A$13.84, while leading telco Telstra Corp shed 0.7 percent to A$5.41. Commonwealth Bank of Australia rose 1.4 percent to A$32.15.

Higher oil and gold prices and a nine-month high for copper prices boosted miners and drillers.

Lihir Gold rallied 3.0 percent to A$1.39, while Newcrest Mining climbed 3.9 percent to A$5.27.

Shares in resources conglomerate BHP Billiton rose 1.0 percent to A$11.61, while rival Rio Tinto gained 2.1 percent to A$39.35.

Weak corporate fundamentals

Taiwan stocks closed lower as investors shunned recent high-flying tech shares. The benchmark Taiex shares index closed down 65.38 points, or 1.09 percent, at 5,906.73.

While many companies have posted improving revenues in the past few months, other sectors are still lagging.

Analysts said the market was also awaiting the U.S. Fed's policy meeting. The Fed is expected to shift its policy stance to reflect a more upbeat view of the economy.

Shares of AU Optronics shed T$3.30, or 6.29 percent, to end at T$49.29, and rival Chunghwa Picture Tubes was down 4.75 percent at T$38.10.

In Singapore, shares firmed in afternoon trade, lifted by blue chips.

The benchmark Straits Times Index climbed 1.15 percent, or 20.59 points, to 1,806.89 near the close.

Singapore Airlines added 2.8 percent to S$14.80 on confidence that the carrier will be profitable for the full year.

Media conglomerate Singapore Press Holdings rose 2.61 percent to S$23.60.

Banks were also higher. United Overseas Bank rose 2.80 percent at S$14.80 and DBS Group Holdings gained 1.40 percent to S$14.50.

In the technology sector, electronics contract marker Venture Manufacturing moved up 1.62 percent to S$18.80 and computer peripheral maker Creative Technology gained 1.33 percent to S$22.80.

In Hong Kong, stocks were little changed as investors kept an eye on earnings and the Fed meeting.

The benchmark Hang Seng Index was down just 7.81 points or 0.07 percent to 11,222.83 by the close.

Investors picked up shares of Hong Kong's dominant fixed line carrier, Pacific Century CyberWorks, ahead of its 2001 result Wednesday.

PCCW shares surged 3.7 percent jump to HK$2.10 on hopes that stringent cost control and a stable core business would yield better results for the company.

Investment house Goldman Sachs also upgraded the company to its recommended list and assessed the stock's fair value at HK$2.70.

China Mobile lost 1.4 percent to HK$24.50,despite having posted a 55 percent surge in 2001 earnings on Monday.