Share prices in Tokyo rose 1.2 per cent on hopes for strong signs of recovery in the Bank of Japan's "Tankan" survey. The key Nikkei-225 index gained 203.61 points to close at 17,614.66. As a detailed study of Japanese businesses and their plans for the months ahead, the quarterly Tankan survey due out Tuesday is the central bank's key source of data for planning.

Buying was also brisk as there was no threat of Tokyo being overshadowed by US markets, which only resume full trading on Wednesday after the Independence Day break.

Gains in New York Friday helped. Information-technology issues remained in favour, particularly with newly established investment trusts, brokers said. Brokerage dealers on the other hand hunted bargains related to domestic demand, such as steel and chemical stocks.

The market also took heart from Taichi Sakaiya's announcement that he would stay on as head of the Economic Planning Agency (EPA), after he said last week that he did not want to figure in a cabinet reshuffle Tuesday.

Hong Kong: Hong Kong share prices dropped 0.2 per cent in directionless trade. The key Hang Seng index lost 30.81 points to close at 16,124.97.

Dealers said the telecom sector was hit the hardest while property sector reversed its downward trend on news that Hong Kong Chief Executive Tung Chee-hwa has dropped his target of building 85,000 subsidized flats annually.

Josephine Hui, director of Celestial Asia Securities, said: "The market does not have a clear direction, and there was a lack of buying interest after window-dressing by fund managers for the half year-end."

Sydney: Australian shares eased marginally amid concerns over a new taxation system introduced this month. Buyers and sellers cancelled each other out, but the market was able to maintain most of last Friday's gains.The all ordinaries index continued to hover near a record high but closed 1.1 points lower at 3,256.5.

Singapore: Singapore share prices closed 1.6 percent higher as investors brushed aside worries of a rise in US interest rates next month. Share prices were higher on selective buying of blue chip stocks following Wall Street's gains Friday.

Small-cap stocks also attracted interest, with institutional investors largely sidelined. Although the market was boosted by Wall Street's gains, fears of a possible interest rate hike at the next Federal Reserve meeting in August remain. The Fed Left rates unchanged last week. The Straits Times Index climbed 32.84 points to 2,070.81 from Friday's 2,037.97.

Kuala Lumpur: Malaysian shares plunged 4.7 per cent on foreign selling and amid continuing concern after the start of the staggered release of long-frozen Central Limit Order Book International (CLOB) shares. The Kuala Lumpur Stock Exchange composite index ended down 39.44 points at 793.93.

Dealers said thin volume exaggerated the losses following foreign selling of selected blue chips. They said the release of CLOB shares also triggered some selling. The CLOB shares were traded on an over-the-counter market in Singapore which was forced to close with the introduction of capital controls in Malaysia in September 1998. The shares have since been frozen. One research head of a local brokerage added the composite index's sharp decline was exaggerated by the lack of buyers.

Seoul: South Korean share prices rose 1.7 per cent, helped by falling money market rates and improving investor confidence. The Korea Stock Exchange index closed up 13.99 points at 835.21. Money market rates fell sharply on rowing demand from bond-buying funds, providing additional support to the market.

Small and mid-cap stocks fared well, supported by the view that they are now undervalued. Some of the banks were sold off after their recent sharp gains but this did not seem to reflect any concerns over a possible strike by bank workers.

-- AGENCE FRANCE PRESSE