The market was also supported by growing optimism over Japan's economic prospects despite expectations that credit rating agency Fitch IBCA would downgrade Japan's sovereign rating. The key Nikkei-225 index gained 105.73 points to 17,475.90, with the Topix index of all first-section issues up 16.22 points at 1,594.66.

The Federal Reserve's decision and subsequent rises on Wall Street "had a strong impact" on Japanese shares, Sakura Securities' equity trading manager Tsuyoshi Segawa said. The possibility of the rating downgrade by Fitch, which has been rumored since Wednesday, did not trigger selling, brokers said. "As you can see in the bond market, government bonds were not sold and (share) investors do not seem to be concerned very much," Segawa said.

Hong Kong: Share prices fell 0.9 per cent on profit-taking after recent gains. "There has been a bit of profit-taking after past gains, in Hutchinson and Cheung Kong, although there has been no heavy selling pressure on the market," said Howard Gorges, vice-President of South China brokerage. The key Hang Seng index closed down 151.62 points to close at 16,286.80. Dealers said the decision of the US Federal Reserve to leave key interest rates unchanged was widely anticipated and had only marginal impact on local sentiment. However, Jerry Pang, HSBC Securities sales director, said though the Federal Open Market Committee (FOMC) decided not to raise rates, some people still forecast a 25-50 basis-point increase by the end of the year.

Singapore: Share prices closed 0.6 per cent lower on persistent worries of a US interest rate rise. The Straits Times Index fell 11.45 points to 2,049.71, and the All-Singapore Equities Index was 2.78 points weaker at 554.07. "Despite the FOMC move to leave rates unchanged, the interest rate overhang is still there," said a dealer with a local brokerage. The Federal Open Market Committee (FOMC), the US Federal Reserve's policy making board on Wednesday agreed to leave rates unchanged but there are fears that they could raise rates in their meeting in August, dealers said.

Kuala Lumpur: Malaysian share prices closed 1.3 per cent lower on profit-taking. The Kuala Lumpur Stock Exchange composite index ended down 11.29 points at 830.25. Dealers said select blue chips led by Maybank and Telekom Malaysia closed lower on profit-taking after Wednesday's gains, although second-liners were actively purchased.

Seoul: South Korean share prices closed mixed after heavy profit-taking eroded early gains made on the back of strength on Wall Street and steady US interest rates. The Korea Stock Exchange index closed up 0.17 points at 818.90. Kyobo Securities Choi Sung-Ho said: "Both external and internal factors seem favorable for the market." But it will take some time for investment trusts to fully regain their buying power, he said.

Bangkok: Thai shares tumbled 3.3 per cent as investors shied away because of an increasingly volatile political situation. Thailand's New Aspiration Party, the largest Opposition group, has staged a mass resignation from parliament and demanded the government dissolve the house and withdraw the 2001 budget Bill. The Stock Exchange of Thailand (SET) composite index tumbled 11.13 points to 323.35. The SET 50 index shed 0.88 points to 22.92. Dealers said foreign investors continued to scale back their weightings as they were unsettled by the possibility of months of politicalunrest as the government attempts to survive.

Jakarta: Indonesian share prices closed 0.5 per cent higher in volatile trade following the decision of the Federal Open Market Committee not to lift US interest rates. The Jakarta Stock Exchange composite index closed up 2.479 points at 512.597, off a high 513.268 and a low of 508.693, on 869.44 million shares valued at 496.960 billion rupiah (57.8 million dollars). A dealer with Ramayana Artha Perkasa said the market opened higher amid a positive reaction to the decision of the FOMC meeting to keep US rates unchanged.