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WorldCom Revelations Trigger Asian Market Rally - 2002-06-28


Major Asia markets rallied Friday, but still ended mostly lower, or flat, from last week's close. More accounting fraud scandals in the United States are sending investors to Asian shares, say analysts.

Bargain hunters stepped into the Hong Kong market Friday, helping it recover from midweek losses. The Hang Seng Index ended the week at 10,598, up seven points from last Friday's close.

Analysts say the gains in Asia were triggered by revelations that WorldCom, America's number two long-distance carrier, is mired in accounting fraud.

Economist Marc Faber expects the gains to continue. "There has been a major shift of money flow away from the U.S. to Asia, and I think this will continue. Whether we have a recession again in the U.S., which I think is very likely, the double-dip, or not, the Asian markets are bound to outperform the U.S.," Mr. Faber said.

In Tokyo, telecommunications, technology and automaker issues strengthened the market. The Nikkei average closed this Friday at 10,621, up 2.5 percent from last Friday. Electronics maker Sony jumped 5 percent, while NEC rose four percent. Analysts say Tokyo stocks mirrored new optimism in the U.S. market.

In Taipei, the Taiex ended at 5,153, down 5 percent from last Friday.

Seoul shares were up following Thursday's down day, finishing at 742. That closing was still more than four percent below last Friday's finish.

Semi-conductor-related issues rallied for a second straight day, recovering some of Wednesday's heavy losses. Samsung Electronics, the world's biggest computer memory-chip maker, soared more than 5 percent.

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