Investors in Asia reacted to political developments this week by selling shares in Taipei and Manila on fears of instability.
Taiwan's main share index took a beating on Thursday, losing two percent as lawmakers debated a controversial bill many thought might draw the island into a confrontation with China.
Wong Jin Ping, the head of Taiwan's lawmaking body, announced the vote's result.
After hours of parliamentary debate, Mr. Wong said a version of a bill had been passed.
The immediate threat of a cross-strait conflict subsided, even as Beijing condemned the law as secessionist.
Taiwan's main share index reacted favorably Friday, rising 31 points to close at 5,771. The index, however, was one percent down on the week.
Morgan Stanley's Asia economist Andy Xie says more volatility is expected before Taiwan's presidential elections next March.
"Right now the Asia specific factors are quite powerful," he said. "The issue is about capital flight. When you have political instability, then the people are more inclined to park their money abroad."
Mr. Xie points to the market turmoil in the Philippines, where a movie star announced his candidacy for the May 2004 presidential elections. Business leaders fear Fernando Poe, a high school dropout with no political experience, is incapable of handling the presidency.
Manila's main stock market index fell 1.5 percent to close Friday at 1,313. The Philippine peso also sank this week to its lowest level in years, closing Friday at 55.7 pesos to the dollar.
South Korea's Kospi index finished the week more than three percent higher at 796.
Hong Kong's Hang Seng benefited from capital flight this week, ending four percent higher at 12,317. Mr. Xie says investors see economic and political stability in the territory.