Asia stocks rise but still vulnerable

Stock markets in Asia bounced back Tuesday as the brave hunted for bargains despite continuing turmoil on Wall Street.

Although Japan, Hong Kong, South Korea, Taiwan and Singapore all rebounded, analysts said uncertainty over the outlook for Wall Street meant the worst might not be over.

The Tokyo Stock Exchange's Nikkei 225 index edged 26.62 points higher to 10,215.63, recovering from morning losses which followed another gruesome session on Wall Street.

On Monday the Dow Jones industrials index dived 234.68 points or 2.9 percent to close at 7,784.58, its lowest level since October 1998. The Nasdaq slumped 36.50 points or 2.8 percent to 1,282.65, a level unseen since December 1996.

Despite the gains in Tokyo Tuesday, analysts said the Nikkei 225 index was still vulnerable.

"There are still uncertainties remaining in the stock market, such as the outlook for Wall Street. For this week, I think that the upside of the Nikkei 225 will be limited," said Morihiko Ida, senior strategist at Century Securities.

However, Finance Minister Masajuro Shiokawa tried to talk up the prospects for Tokyo shares, saying the better performance of the Japanese market proved the local economy was bottoming out.

"If the stock market can endure through the summer, I think it will turn up from the autumn," he said.

Hong Kong's key Hang Seng index rose 203.64 points to close at 10,313.89, led by a rebound in property stocks.

In Jakarta, shares ended marginally higher, led by late bargain-hunting in Gudang Garam and Telekomunikasi Indonesia shares after recent falls, dealers said.

The Jakarta Stock Exchange Composite Index ended up 0.4 percent, or 1.807 points, at 477.081, up from a low of 470.286. The main index opened 0.8 percent lower after another drop on Wall Street overnight.

In Taiwan, the weighted index rose 115.73 points or 2.3 percent to close at 5,159.23 and Singapore's Straits Times Index advanced 29.85 points to close at 1,565.72.

In South Korea, the composite index closed 22.62 points or 3.1 percent higher at 743.52 in a technical rebound.

"Steep falls usually spawn a sharp technical rebound. It seems that the market has put the worst phase behind it," said Lee Hye- Rin of Kyobo Securities.

But other analysts warned the gains could be short-lived.

"It's a bit surprising to see an attempted rebound. It's merely a technical rebound after recent steep falls, and any rebound seems fragile," Meritz Securities analyst Stephen Ryu said. -- AFP