But MSCI's decision last week to reinstate Malaysia on three indices cut little ice in Kuala Lumpur Monday, where the index fell 0.8 per cent following sharp increases last week on the news. ``The reaction to the MSCI news last week was knee-jerk. Now there is a more considered response so the buying tapered off,'' one broker said.

Tokyo: Japanese stocks rallied 2.2 per cent as foreign investors led buying of high-tech and export-led issues following the gains in New York. Late profit-taking, however, slowed the upward momentum and the Nikkei average of 225 leading issues closed 390.86 points higher at 17,826.03. ``It was all sparked off by the New York gains,particularly on the technology-heavy Nasdaq, which boosted high-tech issues here,'' said Kazue Mayuzumi, a senior market analyst at Nikko Securities Co Ltd.

Trading remained thin in the middle of a mid-summer holiday with foreign investors playing the key role, brokers said. Volume totaled 378.53 million shares, down from Friday's 455.10 million.

``Investors are also pinning hopes on Japan's forthcoming economic measures and improvements in corporate earnings,'' Mayuzumi said, noting that major companies were beginning to release April-June earnings results this week.

Hong Kong: Share prices surged 2.3 per cent following a stronger US market on Friday. Alex Tang, research director at Core Pacific-Yamaichi, said the gain was expected after Wall Street's rise, sparked by US economic data showing no inflationary pressure. The key Hang Seng index gained 286.60 points to close at 12,894.78 on turnover $620 million.

The market opened strongly with the key barometer gaining 313.70 points by the End ofthe morning session. Dealers said profit-taking emerged to cap the rise, with 13,000 points seen as a strong resistance level. They said trading was fairly quiet as investors remained cautious amid uncertainty over interest rate trends.

``The gains this morning were muted given the fact that Wall Street had a rally and other regional markets were sharply higher,'' Amsteel senior vice president Jacky Chiu said.

Singapore: Share prices closed 1.5 per cent higher, encouraged by Wall Street's gains last Friday. The key Straits Times Index ended up 28.91 points at 1,998.59, the gains tapering off after hitting a high of 2,015.64, on the back of Wall Street's performance. The broader All-Singapore Index rose 4.61 points to 537.05.

``Shares were up early on a technical rebound following the losses last week and Wall Street's gains on Friday helped. But volumes are low and we are seeing range bound trade with shares slipping on profit-taking later in the day,'' a dealer with a local brokeragesaid.

Kuala Lumpur: Share prices closed down 0.8 per cent but off their lows in volatile trade amid broad based profit-taking, dealers said. An institutional dealer at a local brokerage said profit-taking was the main feature of the day but some buying support was also evident. ``After the very sharp rises last week, profit-taking was expected. There was some squaring of positions as well,'' he said.

Jakarta: Share prices closed up 0.5 per cent but off their highs amid profit-taking in selected large stocks in late trade, dealers said.A dealer at a local brokerage said the market failed to sustain its gains particularly in afternoon trade, due to lack of liquidity. ``In the morning, market sentiment was very positive particularly because the region was strong following Wall Street's positive closing over the weekend,'' he said. ``But there was not much liquidity to maintain upward momentum,'' and people took profits, he said. The Jakarta Stock Exchange composite index ended up 2.772 pointsat 560.481.

Manila: Share prices inched up 0.2 per cent in sideways trading as political uncertainties and worries about a possible US interest rate rise persisted, brokers said. ``Today we just saw the market trading sideways in a very tight band,'' said Oliver Plana of Asiasec Equities. ``The gain was primarily bought about by an increase in the price of San Miguel.''The Philippine Stock Exchange composite index added 4.31 points to close at 2,175.30.

Seoul: Share prices fell 1.1 per cent on continued concerns about the redemption of beneficiary certificates following the announcement of the Daewoo Group's restructuring plan, dealers said. The Korea Stock Exchange index closed down 10.19 points at 907.28. Dongwon Securities analyst Kim Sae-jung said the market maintained its support at 900 points. `However, no further aggressive buying is expected until the redemption of investment trust fund beneficiary certificates eases,'' he said.