Asian stocks rally from crash shock

By staff and wire reports

HONG KONG, China -- Asian stocks took a knock Tuesday morning after Monday's plane crash in the United States. Japan's Nikkei briefly fell below the 10,000 level.

Many stocks rallied later in the day, despite losses in most Asian airlines. Even airlines did an about face, as it became clearer the New York crash was likely an accident and not connected to terrorism.

Hong Kong and South Korea locked in gains, as did New Zealand, after its largest listing reported earnings.

But Japan lost ground, with the Nikkei 225 closing down 0.5 percent at 10,030.56. It briefly fell below the 10,000 mark for the first time since October 3, in the aftermath of September 11.

The broader Topix index lost 0.45 percent to end at 1,016.48.

Stocks were also off in Australia and Taiwan. Singapore was basically flat late in the day, but had risen into the black after posting earlier losses.

Bank shares prompt another Tokyo drop

In Tokyo, bank shares were again troubling investors. They have been frustrated about a lack of progress dealing with a raft of bad loans on Japanese banks' books.

Mizuho Holdings Inc., the world's largest bank by assets, fell 1.3 percent to 304,000 yen, another closing low.

Its counterpart Sumitomo Mitsui Banking Corp. drifted 5.85 percent to 644 yen.

Many experts view bad loans and problems with the banking sector as the biggest problem facing Japan's moribund economy.

Airline stocks were dropping all over Asia. Japan's flagship carrier, Japan Airlines Co., lost 3.37 percent to 287 yen.

It confirmed late Monday it plans to buy Japan's No. 3 carrier, Japan Air System, to form the world's sixth-biggest airline. They expect to set up a joint holding company by next September.

Japan Air System stock fell 2.67 percent to 3,650 yen. Japan's second-biggest airline, All Nippon Airways Co., was adrift 1.9 percent at 305 yen.

Hang Seng posts rise as Cathay rallies

Hong Kong's benchmark Hang Seng index rose smartly, putting on 0.66 percent to end at 10,662.84.

The largest listing, bank HSBC, lifted 0.3 percent to HK$89.50.

The island territory's largest carrier, Cathay Pacific, ended up 0.6 percent at HK$8.15. But it is still well off its post-September 11 low of HK$5.90.

It rallied through the afternoon, after falling as much as 2.4 percent.

Chinese mainland carriers didn't fare as well. China Eastern dropped 2.1 percent to end at HK0.94.

China Southern Airlines was off 1.04 percent at HK$1.90.

Television broadcaster TVB fell 5.1 percent to HK$28.00. Falling victim to the bad economy, the company said it was scrapping its normal pay system, which sees employees get a 13th month of salary. Across the border in mainland China, stocks lost ground for a second day after China's weekend accession to the World Trade Organization.

Investors have been locking in gains on the long-awaited approval, which will take a month to go into effect.

Investors were also fretting about Huaneng Power International's announcement that it will raise $302 million in an A share offering. Such IPOs tend to sap resources from the rest of the market.

The Shanghai B share index finished down 0.6 percent, while Shenzhen fell 1.85 percent.

Australia off as banks continue good run

In Sydney, the benchmark S&P/ASX 200 index closed off 0.4 percent at 3,291.7.

Australia's biggest telecom, Telstra, drifted after recent gains from this weekend's election. It dropped 1.96 percent to A$4.99.

Qantas held up stronger than most of its airline counterparts, closing steady at A$3.86. It came back from earlier losses.

National Australia Bank, the country's largest, continued its strong run with a 3.7 percent jump to A$32.17.

Mining giant WMC, one of Monday's biggest gainers, lost 1 cent to A$9.95, as investors wait for an expected takeover bid from Alcoa.

In New Zealand, the benchmark NZSE-40 Capital index climbed 2.1 percent to close at 2,010.00.

Telecom New Zealand drove the gains, rising 6.3 percent to NZ$4.89 after reporting first quarter net profits of NZ$151 million ($63.8 million). Telecom New Zealand is the largest stock traded in Wellington, accounting for 21 percent of the index.

South Korea, Singapore showing gains

In South Korea, the benchmark Kospi index ended with a gain of 0.74 percent at 588.83.

Hyundai Motor Co., the country's biggest carmaker, rose 4.4 percent to 23,500 won, after reporting a 102 percent rise in profits.

For the first nine months of the year, Hyundai earned a net profit of 914 billion won ($711 million), up from 453 billion won the same period last year.

Chipmaker Hynix Semiconductor jumped 3.5 percent to 1,640 won, after its lead creditor, Korea Development Bank, confirmed it is looking to sell off or merge the company with a competitor.

Hynix accounted for 62 percent of total trading in South Korea for the day.

In Taiwan, the benchmark Taiex closed down 0.86 percent at 4,136.54.

Traders were jumpy after the U.S. crash. Transportation stocks were the big loser, with airlines again selling off.

China Airlines, the island's biggest carrier, fell 2.5 percent to T$11.75. Eva Airways dropped 3.45 percent to T$7.00.

There was some support for the market after the government eased restrictions on overseas investors.

Singapore's benchmark Straits Times index was basically flat, posting a gain of 0.23 percent, at 1,373.47 going into late trade.

The market was rallying after losing as much as 1.13 percent in the morning.

Singapore Airlines had recovered from an initial drop of 6.4 percent and was down 3.7 percent at S$9.05.

Indian shares were off almost 1 percent, with the Mumbai main index down 0.96 percent at 3,064.30 in afternoon trade.

Telecom VSNL was weighing on the market, the monopoly long distance carrier plunging after regulators recommended unlimited competition on international phone calls.

Reuters contributed to this report.