Asia closes higher on war news

The SARS virus is raising the threat of recession in parts of Asia. Story Tools

HONG KONG, China -- Asian stock markets finished mostly higher on Wednesday as investors welcomed reports that U.S. forces had encircled the key Iraqi city of Karbala and were advancing towards Baghdad.

Japanese stocks led the advance, followed closely by blue chips in South Korea, Hong Kong and Singapore. Taiwan was the only major share market to post a decline.

Tokyo's Nikkei 225 erased an early loss of nearly one percent to end 1.04 percent higher at 8,069.85, marking its second day of gains. The broader Topix index rose 1.09 percent to 797.56.

Japan's dominant mobile phone operator, NTT DoCoMo, climbed 2.22 percent to 230,000 yen.

Big-name Japanese tech shares also rose on weakness in the Japanese yen and hopes that an early U.S.-led victory in Iraq would stoke global consumer and business spending.

Chip equipment maker Advantest rose 3.15 percent to 4,260 yen, while Fuji Photo Film, which gets half of its sales from overseas, added 1.67 percent to 3,650 yen.

Electronics giant Sony was another notable winner, rising 0.97 percent to 4,150 yen.

The dollar strengthened to 118.52 yen in afternoon trade in Asia, up from a session low of 117.60 as the market reacted to the Karbala news.

But major Japanese banks were hit by heavy selling for a second day. Mizuho, the world's largest bank by assets, tumbled 8.43 percent to 81,500 yen. Sumitomo Mitsui Financial Group, UFJ Holdings and Mitsubishi Tokyo Financial Group all lost between three to six percent.

South Korea recovers

In Seoul, the benchmark Kospi rose 0.81 percent to 542.92, as institutional investors went bargain hunting for blue chips such as SK Telecom. South Korea's top mobile phone carrier leapt 3.15 percent to 163,500 won.

The market's gains were limited by a 1.76 percent drop in heavyweight stock Samsung Electronics to 279,000 won. Samsung came under renewed selling pressure after a preliminary ruling by the U.S. Department of Commerce found South Korea unfairly subsidized memory chips imported in the United States.

Hong Kong's Hang Seng Index finished 1.27 percent higher at 8,706.19. Travel and tourist stocks led a cautious rebound after the benchmark index dropped to a new four-and-a-half-year low early in the session.

Cathay Pacific Airways was 2.59 percent higher at HK$9.90. Hong Kong's top carrier had fallen sharply in recent days as the SARS virus scared away would-be travelers and caused more than 50 deaths in the region. (Full story)

HSBC Holdings, the market's biggest stock, rose 1.56 percent to HK$81.50.

Hong Kong-based exporters Li & Fung and Johnson Electric rose by 5.6 percent and 3.5 percent respectively after stocks in the U.S., their main market, bounced back from four days of losses

On Tuesday, the Dow Jones industrial average rose almost one percent, and the tech-heavy Nasdaq composite gained 0.5 percent. (Full story)

In Singapore, the Straits Times index was 1.34 percent higher at 1,299.77 at the close.

SingTel rose 3.65 percent to S$1.42 on expectations that people would substitute telecommunications for physical travel in light of the SARS outbreak in the city state.

Singapore Airlines rebounded from 17 month lows to trade 1.13 percent higher at S$8.95. It is cutting flights because of SARS. (Full story)

In Australia, the benchmark S&P/ASX200 ended virtually flat up just 0.1 points to 2882.3, after the central bank again left interest rates on hold, as expected. (Full story)

Media group News Corp jumped 3.76 percent to A$11.03 after a report that SBC, a rival suitor for U.S. satellite broadcaster DirecTV, had dropped out of the race. (Full story)

Financial services group AMP finished 1.15 percent higher at A$7.01. Its AMP Life unit is looking to sell a major cattle business. (Full story)

New Zealand's top 50 index added 0.45 percent to 1,933.59. Telecom NZ rose 2.44 percent to NZ$4.61.

Taiwan's benchmark Taiex was the only loser among the region's top stock indices, falling 0.6 percent to 4,311.56. Chip foundry TSMC, the market's biggest stock, put on 1.42 percent to T$42.80.

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