LONDON (CNNfn) - Asia's largest equity markets closed higher Tuesday after Wall Street's Dow Jones average climbed back above the 10,000 mark Monday and a major merger in the telecom sector stoked demand for shares.
Tokyo's benchmark Nikkei Average of 225 leading shares closed up 239.42 points, or 1.2 percent, at 19,959.52, as hi-tech shares rose, led by consumer electronics giant Sony Corp. Local traders said selling by companies as they unwound cross-shareholdings and account settlement before the end of the business year - at the end of March - limited the market's gains.
Hong Kong's Hang Seng index ended up 185 points, or 1.1 percent, at 17,169.44, off earlier highs, as investors stood by for official statements regarding Pacific Century CyberWorks' success in its battle against rival bidder Singapore Telecom to buy Cable & Wireless HKT. Britain's Cable & Wireless holds a 54 percent of the Hong Kong telecom operator and is said to have chosen PCCW's offer. Shares of both PCCW and C&W HKT were suspended Tuesday pending an announcement.
The Straits Times Index in Singapore ended little changed at 2,120.50, amid healthy gains for Singapore Telecommunications even as it withdrew from the auction for Cable & Wireless HKT. Rupert Murdoch's News Corp., which had earlier offered to invest S$1 billion in SingTel to help the Singapore company's bid, said its offer had lapsed when SingTel terminated its C&W HKT talks. News Corp. said, however, it would continue to explore other options with SingTel.
South Korea's benchmark Kospi index rose 1.1 percent to end at 828.38, boosted by brisk demand for electronics stocks that withstood a late-day bout of selling.
The All Ordinaries index in Sydney closed up 17.7 points, or 0.6 percent, at 3,135.7, helped by a 1.4 percent rise in shares of News Corp. amid hopes that the company is intent on scouting out strategic partnerships. But resource stocks such as BHP and Anglo-Australian miner Rio Tinto fell, hurt by weakness in the price of copper.
In currency markets, the euro struggled to sustain a modest recovery in Tokyo a day after sliding to its lowest level in the 14 months since its launch in January 1999. The single currency was quoted at just under $0.9735 against the dollar, slightly shy of its late level Monday in New York, but well above the $0.9360 trough hit earlier Monday in Asia.
The yen came under mild pressure after disappointing industrial figures. The Japanese currency traded at around 109.93 yen against the dollar, down about a third of a yen from its late Monday level of 109.61.
Shares in Hong Kong and Tokyo drew support from a sharp rebound for Wall Street's blue chip Dow Jones industrial average that hoisted it back above the psychologically important 10,000 mark. The Dow rose 176.53 points, or nearly 2 percent, to 10,038.65, while the tech-heavy Nasdaq Composite fell 12.63 points to 4,577.87. Both the Dow and Nasdaq are up more than 12 percent since the start of the year.
In Tokyo, shares of Sony Corp. rose 5.3 percent to 32,650 yen ahead of
the launch of its new PlayStation2 video-game console Saturday. Each 100-yen rise in Sony lifts the Nikkei by around 10 points.
Sony shares got an extra boost from news that rival Sega Enterprises had lowered its earnings forecast Monday. Sega slumped 12.2 percent to 3,600 yen after it warned of heavy losses this business year as a result of flagging sales of its Dreamcast game machine.
Sharp Corp. rose 2.5 percent after unveiling plans to team up with U.S.-based Lucent Technologies to offer mobile phones. Cellular-phone operator NTT DoCoMo slipped 2 percent to 4.43 million yen.
Seven-Eleven Japan said Tuesday it planned to form a joint venture with Nichii Gakkan to offer shopping services and food delivery for Japan's growing ranks of senior citizens. Shares of the company slumped 8.4 percent after initially firming on the news.
In Hong Kong, local dealers said the PCCW-C&W HKT deal was likely to have a big impact on the market Wednesday after details of the acquisition emerge. The anxiety was palpable in the market Tuesday as the Hang Seng closed about 220 points below its early-afternoon high of 17,290.07.
With shares of PCCW and C&W HKT suspended Tuesday, attention shifted to other blue chips. Property conglomerate Cheung Kong (Holdings) rose 3.5 percent and Hutchison Whampoa gained 2.1 percent. The two companies are controlled by Hong Kong tycoon Li Ka-shing, whose son Richard Li is the chairman of PCCW. On the downside, Sun Hung Kai Properties lost 2.4 percent.
China Telecom rose 1.1 percent, while international bank HSBC Holdings inched about a third of a percent higher after it posted a 25 percent increase in 1999 net profit late Monday.
In other markets, Manila shares slid 4.6 percent to a 15-month low as a weak peso soured the mood. Thai shares ended down 3.6 percent at 374.32, a four-month low, Kuala Lumpur stocks eased fractionally and Taiwan, which reopened after a market holiday Monday, ended flat. Jakarta shares bucked the trend among smaller markets, rising 1.4 percent. 
--from staff and wire reports
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