Exceptions were Hong Kong, where the Hang Seng key index recovered some of its losses from its 4 per cent plunge the previous day, Taipei, which posted a rise before a public holiday, and Jakarta, where former armed forces chief general Wiranto's apparent refusal to step down prompted a 3 per cent fall.

Japanese share prices closed 0.6 per cent lower as investors took profits on the previous session's 30-month high by the headline index. "It was only natural that we saw profit-taking drag the market down today after rises for four consecutive trading days," said Nikko Securities market analyst Kazue Mayuzumi. Share prices "entered a timely correction but the market direction is still upward," he said. The Nikkei-225 index capped a four-session winning streak to fall 116.32 points to 19,423.38, after closing Monday at its highest point since August 8, 1997.

Late bargain-hunting helped the Nikkei recover from a low of 19,266.96, with many investors expecting new investment trusts to push the index further up in February. The market barometer gained 3.4 per cent in the four sessions to Monday on the strength of high-technology and telecommunications issues. But key players including brokerage dealers and foreign investors turned net sellers. The US Federal Open Market Committee (FOMC) is widely expected to raise interest rates at a policy making meeting on Tuesday and Wednesday but "Tokyo investors are not particularly concerned about the FOMC now," Segawa said.

Hong Kong: Shares rose 0.8 per cent in cautious trade following overnight gains on Wall Street. "The market follows Wall Street's gain overnight. It is mainly a technical rebound," said Michael Ng, dealing director at Sassoon Securities. The key Hang Seng index gained 121.52 points to close at 15,653.86 after shedding 4 per cent the previous day. Dealers said trading was cautious ahead of the start of a two-day meeting of the US Fed. They said the consensus in Hong Kong was for the board to raise rates by 25 basis points, with the Hong Kong Association of Banks also likely to raise rates at its next weekly meeting on February 11. However, they added the impact of such a rise would already be discounted by the market. Dealers also said there was a reluctance to open fresh positions ahead of the Lunar New Year holiday starting Friday. Celestial Asia research analyst William Li concluded the 16,000-point market level would offer strong resistance.

Singapore: Share prices closed virtually unchanged on caution ahead of the meeting on US interest rates. The benchmark Straits Times Index rose by 0.11 points to 2,230.39. "Everybody is waiting for the FOMC to announce how much they are raising interest rates," a dealer with a Japanese brokerage said.

Seoul: South Korean share prices fell 1.6 per cent with sentiment dampened by a $400-million trade deficit in January. The composite index closed down 15.13 points at 928.75. Dealers said the market remained depressed, with investors taking a cautious stance ahead of expected Daewoo bond redemptions this month. Hyundai Securities Jeong Tae-Wook warned the January trade deficit, reflecting both increased consumer demand and import prices, could be a harbinger of higher inflation. That would subsequently place pressure on long-term interest rates, he said. Nevertheless, the market would see a modest rise after the smooth redemption of Daewoo bonds, he predicted.

Jakarta: Indonesian share prices closed 3 per cent down after senior security minister General Wiranto showed no sign of resigning as demanded by President Abdurrahman Wahid. "It's obvious, judging by the market reaction, that it (the dispute) is scaring investors here," a dealer with a Japanese brokerage said. An analyst with Dongsuh Kolibindo said the market fell sharply on "concerns over the implications of President Abdurrahman Wahid's move to ask Wiranto to resign," but he thought it overreacted. He said Wiranto's staying on raised the prospect of a political battle between Wahid and the general. "But I think investors overreacted to these political developments," he said, adding that foreign players had offloaded their shares, prompting local players to follow suit, with the falls led by blue chips.

Bangkok: Thai shares closed down 0.7 per cent on concern over US interest rates ahead of the start of a two-day Federal Reserve meeting later in the day. The benchmark Stock Exchange of Thailand (SET) index fell 3.18 points to 474.39, while the select SET 50 was down 0.22 at 34.09.