July 11, 2006	Tuesday	Jumadi-ul-Sani 14, 1427

HONG KONG, July 10: Asian stocks were mostly firmer or off their lows Monday, recovering from a weak start as investors welcomed sharp gains in Tokyo following better-than-expected private sector machinery order figures, dealers said.

They said the markets had opened lower after the latest US employment report Friday spooked Wall Street, which lost 0.59 per cent on concerns the US economy was slowing while inflation was rising.

That is the worst possible combination for equities as it puts the US Federal Reserve back in a bind. It can either leave interest rates on hold to keep the economy going but run the risk of letting inflation get out of the bag, or hike rates to curb price rises and risk a harder economic fall.

It was this conundrum which roiled the markets in May and June but the Fed had appeared to come down with a softer line on interest rates at its last meeting at end-June so the latest US jobs figures were all the more unwelcome.

At the same time, the Asian markets were faced Monday with near-record oil prices and the continued fallout from last week's North Korean missile launches which saw a series of distinctly harder line statements from the protagonists over the weekend.That made for a poor start until Tokyo, up 1.60 per cent, got a major boost from much better-than-expected core private-sector machinery orders data.

TOKYO: Japanese share prices rallied as bargain hunters emerged following recent losses, encouraged by better-than-expected machinery orders data, dealers said.

The Tokyo Stock Exchange's benchmark Nikkei-225 index rose 245.20 points or 1.60 per cent to 15,552.81, coming off a low of 15,079.74. The broader TOPIX index of all first-section share climbed 20.92 points or 1.33 per cent to 1,594.07.

HONG KONG: Hong Kong share prices closed 0.88 per cent higher as a fresh inflow of funds helped the market recover from early weakness, with HSBC, the local Bank of China arm and merchandiser Li and Fung attracting strong buying interest, dealers said.

SINGAPORE: Singapore share prices closed down 0.27 per cent but were off early lows sparked by losses Friday on Wall Street after the latest US employment report, dealers said.

KUALA LUMPUR: Malaysian share prices closed flat in rangebound trade, with the market finding no lead to pick up on, dealers said.

JAKARTA: Indonesian share prices closed 0.60 per cent lower in lacklustre trade with investors opting to take profits in the absence of fresh local leads, dealers said.

WELLINGTON: New Zealand share prices closed 0.25 per cent higher in light trade, shrugging off weakness in offshore markets after the latest US employment report suggested the US economy is slowing, dealers said.

The benchmark NZX-50 index rose 8.96 points to 3,651.24 on turnover worth 1240 million New Zealand dollars (75.8 million US).

MUMBAI: Indian share prices closed 1.66 per cent higher in volatile trade on expectations of strong quarterly corporate results which kick off this week, dealers said.

Mumbai's benchmark 30-share Sensex index closed up 174.77 points at 10,684.30.—AFP