The Seoul stock market was the region's star performer, jumping a record 7.7 per cent on hopes that South Korea's sovereign ratings could be upgraded by Moody's Investors Service.

Hong Kong's Hang Seng index leapt 1.7 per cent on the back of a surprise interest-rate cut by local banks while profit-taking saw Tokyo's Nikkei end 0.3 per cent lower.

Singapore share prices ended down 0.6 per cent and Sydney fell 0.4 per cent in cautious trade. Jakarta and Kuala Lumpur closed barely higher while official attempts to prop up faltering share prices lifted Taipei 1.2 per cent.

Bangkok fell 1.4 per cent as investors sold ahead of the holidays, while Manila retreated 0.7 per centon a lack of buying interest. Clinton became the first US president in 130 years to be impeached on Saturday, in a dramatic twist to a sex-and-perjury scandal that could lead to his ouster. But he vowed not to resign over the Monica Lewinsky affair.

In Hong Kong, Seapower Securities head of research Sunny Chan played down worries of any adverse impact on regional markets from the impeachment. "The fact US capital may be leaving US markets over the Clinton issue and seek investment elsewhere may turn out to be positive for Asian and European markets," he said.

Hong Kong share prices rose as investors cheered an unexpected interest rate cut by the territory's banks at the week-end, dealers said. "The gains were made on the surprise interest rate cut," said Sean Li, associate director at Amsteel Securities, adding the gain had been notched up despite a decline in institutional activity ahead of Christmas and New Year holidays.

"In the past few months, whatever good news came out, we have seen the market'sgains start to become neutralised at around 10,500 points. I don't expect any change in this pattern in the near future," Li said. The key barometer gained 169.78 points to close at 10,396.01 - its third consecutive gain. Major banks cut their prime lending rates to 9.0 per cent with effect from Monday.

Tokyo: Japanese share prices closed 0.3 per cent lower as investors locked in profits, brokers said. The 225-issue Nikkei average of the Tokyo Stock Exchange fell 41.34 points to end At 14,152.95. The Topix index of all issues on the first section was down 2.58 points at 1,099.12. Domestic investors took the ruling party's tax plan and the finance ministry's budget proposal as negative leads, brokers said.

The finance ministry on Monday proposed to the cabinet a budget for the year to March 2000 of 81.86 trillion yen ($ 711.8 billion), up 5.4 per cent from a year earlier.

"In addition, domestic players are not in a mood to make fresh moves ahead of a public holiday the day after tomorrow," a brokersaid.

"Foreign investors also reduced their market presence ahead of the Christmas holidays and following the settlement of their 1998 account books," the broker said. The US government's decision to discontinue air strikes against Iraq and the impeachment proceedings against president Bill Clinton failed to have any material impact on the trend of the market, brokers said. "Both developments were well anticipated," the broker said.

Singapore: Singapore share prices closed 0.6 per cent lower in dull trade amid the release of economic data showing a sharper-than-expected drop in vital non-oil domestic exports in November. "The figures were disappointing. Most people had been expecting them to be flat at worst and a pick up in certain sectors such as electronics was hoped for," a dealer with a Europe-based brokerage said.

The Straits Times Index fell 8.23 points to 1,397.73, while the broader All-Singapore index fell 3.32 points to 382.92. The Trade Development Board announced that Singapore's key non-oildomestic exports fell 6.5 per cent from a year ago to 7.52 billion dollars ($ 4.56 billion) in November, which analysts said signalled a deepening recession.

Kuala Lumpur: Malaysian share prices closed 0.1 per cent higher due to buying support extended by local institutional investors for index-linked stocks. The Kuala Lumpur Stock Exchange's composite index ended 0.43 points higher at 550.84 while the second board index fell 10.83 points, or 6.2 per cent, to 173.84.

Bangkok: Thai shares closed down 1.4 per cent in light trade with many investors seen cashing out ahead of the Christmas holiday, analysts said. The market ignored the impeachment of US president Bill Clinton, one local analyst said, adding that foreign investors would likely remain on the sidelines until early next year.