In Hong Kong, however, shares opened 0.5 per cent lower on profit-taking, despite the overnight gains on Wall Street. The Hang Seng index lost 70.17 points to 13,695.32, shortly after trading started. On Tuesday, the Dow had risen by 160.20 points to 10,815.35, while the IT-heavy Nasdaq composite gained 39.67 points to 2,642.11. The gains were attributed to rumours that the Federal Reserve would hike short-term interest rates by 0.25 percentagepoints.

In Indonesia, stocks closed the morning marginally higher as profit-taking in large caps trimmed gains amid caution ahead of a decsion by the Federal Reserve. The composite index closed the morning up 1.399 points at 681.960, off a high of690.142. Advances led declines 65 to 48 and the rupiah was trading at 6,720-6,740 to the dollar. Philippine share prices advanced slightly due to liquidity inflows and an overnight rise in the US markets. The Philippine Stock Exchange composite index rose 2.39 points to close at 2,486.96 points.

In Taiwan, share prices dipped by 0.6 per cent on profit-taking spurred by institutional investors. "Selling was mainly sparked by foreign investors after they began to sell some of the technology shares in the previous session," said Yu Yin-kai, analyst of Grand Cathay Securities. Expectations of a US interest rate hike, however, did not have any impact on the bourse, Yu said, noting that Wall Street seems to have already factored in a rate increase. The Taiwan StockExchange weighted price index lost 46.90 points to 8,467.37, on a turnover of 194.92 billion Taiwan dollars (or US $ 6.03 billion).

After seen a heady morning session in Tokyo (when the Nikkei hit this year's highest intra-day level of 17,958.34 points), most investors expected window dressing buying on the last day of the month. Such buying by foreign investors was also expected, as Wednesday was the last day of trading in the first half of this year, but limited follow-through buying in the afternoon dampened sentiment, brokers said.

Profit-taking in the afternoon began to worry institutional investors who expected the market to sustain its recent strength by the end of June and expanded their positions, brokers said. Investors including brokerage dealers "dumped their stocks as buying ran out ofsteam in the afternoon," New Japan's Segawa said.

-- AFP