HONG KONG - ASIAN shares, led by Japan, rose on Friday after encouraging earnings signals from technology firms such as IBM and a slowly improving tone in beleaguered short-term money markets helped ease concerns about a global recession.

Asian stocks posted their first weekly gain in seven, with advances in the last trading day underpinned by a rally on Wall Street on Thursday that sent the Dow Jones industrial average up more than 4 per cent.

Oil prices rose nearly $3 a barrel in Asian trade, helped by the equity gains and growing expectations for an Opec production cut following a tumble in crude.

But jitters remain after a volatile week that saw global stock markets rally and slump on alternative days amid signals of a potentially deep economic slowdown worldwide.

The dollar sagged against the euro, but the US currency held steady against the yen.

'There's still nervousness in the market about the real economy, but in terms of valuations the price is good right now,' said Mr Nagayuki Yamagishi, a strategist at Mitsubishi UFJ Securities in Japan.

'The economic problems are the main theme of the market right now and everybody knows this, so rises will be limited.'

The MSCI index of Asia-Pacific stocks rose half a percent, after slumping 8 per cent the previous session.

The index had gained around 1 per cent for the week, its first weekly gain since the end of August.

Friday's tone was helped by some encouraging earnings signals. International Business Machines Corp said late on Thursday it expects to meet long-term profit forecasts, partly due to continued growth in emerging markets.

Meanwhile, US firms such as Internet search leader Google Inc and chip maker Advanced Micro Devices Inc posted results after US market hours that beat expectations.

On the credit front, recent unprecedented measures by central banks to inject liquidity into the financial system appeared to be bearing some fruit.

US dollar short-term funding costs eased for the fourth day in Asia, though stress remained in several local markets due to heightened counterparty and term risks.

But analysts warned investors would be unlikely to steer their attention from concerns over the global economy.

'The focus of the market is now shifting gradually to the weakness of the real economy,' said Mr Minoru Shioiri, chief manager of forex trading at Mitsubishi UFJ Securities.

Data on Thursday showed US industrial output posted its biggest drop since 1974 in September, while a regional factory index slumped and labour markets showed softness.

Japan's Nikkei average rose 2.8 per cent, clawing back after falling 11.4 per cent on Thursday in its biggest loss since the 1987 crash.

Shanghai's main index advanced 1 per cent, boosted by oil refiners riding on lower crude oil prices.

But other major indexes in the region fell as recession fears continued to weigh.

Hong Kong fell more than 4 per cent while stocks in Singapore were not far behind. South Korea and Taiwan dropped more than 2 per cent while Australian stocks lost 1 per cent.

India's Sensex shed nearly 6 per cent to close below the 10,000 mark for the first time in more than two years.

Oil rally
The gains in equity markets, however tentative, bolstered oil prices. US crude futures for November delivery rose $2.9 to $72.79 a barrel, reversing a decline of more than 6 per cent during US trade on Thursday.

Base metal prices also rallied, with London Metal Exchange copper, zinc and lead all up sharply percent in Asian trade.

In currency markets, although the dollar sagged against the euro it held flat near the yen in choppy trade as some investors remained concerned about a global recession.

'Fears about financial institutions going under have eased since the Group of Seven meeting last week as governments showed readiness to pump in public funds,' said Mr Takahide Nagasaki, chief forex strategist at Daiwa Securities SMBC.

'The easing of such fears is slowly reversing a previously seen flight to safety into such currencies as the yen,' Mr Nagasaki said.

The euro was up 0.4 per cent from late on Thursday New York trade at 1.3505, while the dollar held steady against the yen at 101.51.

KUALA LUMPUR
Share prices on Bursa Malaysia ended lower today in volatile trading as investors locked in profits ahead of the weekend amid fears of the global economic downturn, dealers said.

'Trading was volatile as the market barometer, Kuala Lumpur Composite Index (KLCI), was up more than six points in the early session following the sharp rebound on Wall Street overnight but closed down more than 16 points as investors exited ahead of the weekend,' a dealer said.

The KLCI fell 14.79 points to close at 905.23. It had opened 5.89 points higher at 925.91.

The Industrial Index lost 24.14 points to 2,132.07, the Finance Index dropped 172.20 points to 6,965.32 and the Plantation Index declined 34.23 points to 3,820.00.

The FBMEmas fell 24.68 points to 6,065.28, FBM30 went down 82.34 points to 5,892.18, FBM2BRD slipped 104.32 points to 4,404.29 and FBMMesdaq Index was 118.10 points lower at 3,505.76.

Decliners led advancers by 461 to 204 while 207 counters were unchanged, 461 untraded and 24 suspended.

Volume fell to 582.434 million shares from Thursday's 897.066 million shares.

SHANGHAI
Chinese share prices closed up 1.08 per cent on Friday led by financial companies following a rally overnight on Wall Street, dealers said.

They said investors were also betting more government measures would be announced before the release of September?s key economic data on Monday.

The benchmark Shanghai Composite Index, which covers A and B shares, was up 20.71 points at 1,930.65 on turnover of 26.2 billion yuan (S$5.6 billion).

The Shanghai A-share index added 21.77 points, or 1.08 per cent, to 2,028.03 on turnover of 26.1 billion yuan, while the Shenzhen A-share index rose 4.58 points, or 0.87 per cent, to 530.01 on turnover of 12.0 billion yuan.

HONG KONG
Hong Kong share prices closed 4.4 per cent lower on Friday, tumbling in late trade as investor confidence drained from the market on worries over the global economy, dealers said.

The benchmark Hang Seng Index finished 676.31 points down at 14,554.21, as selling pressure overturned a 70 points gain around noon.

Turnover was light at 59.35 billion Hong Kong dollars (S$11.3 billion).

The index was down 1.6 per cent for the week, with strong gains earlier in the week ebbing away. The huge 2,587-point range during the week highlighted the volatility as investors remained nervous.

Mr Castor Pang, a strategist with Sun Hung Kai Financial, said he expects the index to head toward 14,000 points next week, as Asian investors become more aware of their countries' deteriorating economic conditions.

'Economic woes in Korea are hurting investors' sentiment around the region. With no resolution in sight, I believe the market will stay gloomy,' he told Dow Jones Newswires.

South Korea's government held an emergency summit on ways to shelter the economy from the global turmoil, after its shares tumbled to a three-year low and the won dropped by the most since the 1997 Asian crisis.

Mr YK Chan, a fund manager at Phillip Asset Management, said Hong Kong investors ought to wait until the market volatility eases.

'It's easy to say that the market has fallen to attractive levels on a valuation standpoint and investors should buy and hold for long term, but such swings makes it hard for investors to execute such a strategy,' he said.

TOKYO
Japanese share prices closed 2.78 per cent higher on Friday, clawing back some of the previous day's heavy losses as an overnight rally on Wall Street soothed investor jitters.

Tokyo's benchmark Nikkei-225 index climbed 235.37 points to end at 8,693.82, a day after plunging more than 11 per cent, the biggest loss in two decades.-- AFP, AP, BERNAMA