LONDON (CNNfn) - Tokyo blue chips galloped higher Tuesday, spurred by a scramble for leading high-tech shares in the wake of Monday’s blockbuster marriage of U.S. media and entertainment giant Time Warner and top-ranked Internet service provider AOL. Hong Kong shares ended little changed as anxiety over U.S. interest rates nipped at investors’ shirtsleeves. Australian stocks rose to a record close.
In Tokyo, the Nikkei Average of 225 leading blue-chip shares soared 3.6 percent, or 657.51 points, to end at 18,850.92 as it resumed trading after a three-day weekend. The $182 billion all-stock merger of AOL and Time Warner and a sharp overnight rally on the U.S. Nasdaq jolted the tech sector out of its recent doldrums.
Analysts said the shares that weighed on the market last week - when the Nikkei shed almost 4 percent in tandem with heavy losses on the U.S. Nasdaq - led the market charge Tuesday.
"The opinion both in New York and Tokyo is that high-tech shares have seen enough correction and are ready to head higher,” Hirokuni Matsumoto, a trader at Yamatane Securities in Tokyo, told Reuters.
On Monday, U.S. and European equity markets roared up, supported by big gains in technology and media stocks. The Nasdaq composite soared 4.3 percent, or 167.05 points, to a level 2 percent shy of its Jan. 3 record close of 4.131.15. The Dow Jones industrial average climbed 49 points, or 0.43 percent to a new peak of 11,572.20.
In Tokyo Tuesday, consumer electronics giant Sony Corp., which slid last week after its president said he felt its shares were overvalued, leapt 8.4 percent to 25,700 yen. Hitachi shot up 11 percent to 1,625 yen after saying it agreed to join forces with U.S. telecom equipment maker Qualcomm Inc. (QCOM) to commercialize a new mobile data communication system.
In the pure media sector, Fuji Television Network rocketed by its daily limit of 200,000 yen, or 15.5 percent, to close at 1.49 million yen. Tokyo Broadcasting System soared 15.4 percent to 3,750. But local traders stressed that Time Warner differed significantly in size and scope from its Japanese counterparts, whose gains they said are likely to be more short-lived. Yahoo! Japan also posted strong gains, fed by enthusiasm over the U.S. merger.
Euphoria over the U.S. multimedia marriage failed to fuel a similar rally in Hong Kong, where investors were cautious. The Hang Seng index closed up 13.95 points, or 0.09 percent at 15,862.10 after darting in and out of positive territory. Traders attributed some of the selling pressure to a shift of Y2K funds out of the market and anticipation of a slight rate hike when the U.S. Federal Reserve’s policymaking committee meets from February 1 to 2. Volume on the Hang Seng was HK$19.81 billion, up from HK$19.57 billion Monday.
Among the handful of media-related stocks that rode the crest of the AOL-Time Warner deal to higher finishes, Paramount Publishing Group rocketed 36 percent to HK$1.66, Oriental Press Group advanced 11.7 percent to HK$1.82 and SCMP Holdings gained 11.1 percent to HK$7.00. None of those stocks trade on the benchmark Hang Seng, however.
Red-hot Internet firm Pacific Century CyberWorks, Tuesday’s most active stock, gained 4.8 percent to close at HK$16.50, while China Telecom advanced 3 percent to end at HK$48.40. On the downside, banking giant HSBC Holdings slipped 1.8 percent to HK$98.00.
In Australia, the All Ordinaries climbed to a new record close thanks mostly to a spectacular rally by Rupert Murdoch’s News Corp. on the heels of the U.S. media merger. The benchmark gauge finished up 61.5 points, or just under 2 percent, at 3,164.6, surpassing its previous closing peak of 3,152.5 achieved on Dec. 30, 1999. During the session, the index also touched a new intraday peak of 3,173.9.
News Corp., which represents about 10 percent of the index’s total capitalization, saw its ordinary shares rocket 28 percent to a closing high of A$18.603.
The Straits Times Index in Singapore gave up 1 percent, closing at 2,409.70, as traders focused on the prospects for U.S. corporate earnings, economic data and interest rates. Blue chip DBS Group, Southeast Asia’s largest banking group, fell 60 cents to end at S$23.90.
Kuala Lumpur came off a four-day holiday weekend in grand fashion, vaulting 3.5 percent to a six-month high of 846.74, powered by sharp rallies in telecom, technology and media issues. Jakarta shares trimmed early gains to close up 1.1 percent, while the weighted index in Thailand closed down 1.5 percent amid profit-taking in banking and telecom stocks.
Taiwan stocks saw a strong early rally erased to end down nearly 2 percent amid profit-taking in heavyweight tech issues. South Korea also slipped, finishing 0.6 percent lower at 981.33 as overseas and institutional investors opted out of blue-chip telecoms to buy entertainment and Internet stocks, along with food and beverage issues. Manila stocks ended little changed. 
--from staff and wire reports
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