Asian stocks rose, rebounding from their worst declines in more than two years. NTT DoCoMo Inc and Taiwan Semiconductor Manufacturing Co led gains as some investors bet regional economic growth won't be derailed by an increase in US borrowing costs.

　　"The stock market and the economy are still looking stable," said Nobuyoshi Tsumori, who helps manage US$880 billion at Barclays Global Investors Ltd in Tokyo. "The main focus among investors right now is earnings."

　　The Morgan Stanley Capital International Asia-Pacific Index, which tracks more than 850 stocks in the region, advanced 0.4 percent to 84.13 in Tokyo. The index had its biggest tumble on Monday since the day after the September 11 terrorist attacks on concern US interest rates may climb.

　　India's Sensitive Index plunged 4.1 percent, set for its biggest drop since September 21, 2001. Exit polls indicated the ruling coalition won't win a majority in general elections, undermining efforts to sell state-owned companies and boost overseas investment.

　　The Philippine Stock Exchange Composite Index sank 3 percent as concerns the United States may raise interest rates outweighed President Gloria Arroyo's lead in early election returns. The market was closed on Monday for the election.

　　The Thai SET Index climbed 2.1 percent, the biggest gain among the region's benchmarks, led by Siam Cement Pcl. Indexes rose in every other market in the region except for Malaysia's Kuala Lumpur Composite Index.

　　Japan's Nikkei 225 Stock Average rose 0.2 percent to 10,907.18, while the Topix index added 0.3 percent to 1,088.89. NTT DoCoMo, the world's second-largest mobile-phone company, climbed 2.1 percent to 191,000 yen (US$1,680.74). The stock plunged a record 13 percent on Monday.

　　Taiwan Semiconductor, the world's largest supplier of made-to-order computer chips, rose 4.6 percent to 57.50 New Taiwan dollars (US$1.70), erasing a 3.5 percent slide on Monday. Taiwan's Taiex Index added 1.1 percent to 5,886.38.

　　Kookmin Bank, S. Korea's largest lender, rose 4 percent to 40,300 won (US$33.88), snapping a four-day, 14 percent slide.

　　Asahi Glass Co surged 7.6 percent to 1,157 yen. Japan's biggest glassmaker raised its full-year profit forecast by 27 percent to 28 billion yen this year because of increasing demand for glass parts used in digital electronics.

　　Mitsubishi Corp advanced 5 percent to 996 yen. Full-year profit jumped 85 percent, helped by sales from energy trading and mining operations, it said. Japan's largest trading company expects profit to increase 13 percent this fiscal year.

　　Hon Hai Precision Industry Co, Taiwan's biggest electronics company by sales, rose 2 percent to NT$125. The company said April sales jumped 42 percent from a year ago.

　　Chartered Semiconductor Manufacturing Ltd, Singapore's biggest chipmaker, climbed 2.1 percent to 1.44 Singapore dollars (84 US cents). It dropped 7.2 percent in the previous four sessions. Siam Cement, Thailand's biggest cement maker, rose 4.7 percent, rebounding from its 6.3 percent slide yesterday.

　　"The recent slump created a good opportunity for investors to buy stocks with solid earnings outlooks," said Yoshihisa Okamoto, who helps manage US$1.9 billion at Fuji Investment Management Co in Tokyo. Stocks including Kaga Electronics Co, an electronic parts maker, are good investments, he said.

　　India's Reliance Industries Ltd, the world's second-largest maker of polyester, slumped 3.6 percent to 500.55 rupees (US$11.02), while ICICI Bank Ltd, India's second-largest lender, lost 5.7 percent to 283.3 rupees.

　　An exit poll after elections on Monday showed Prime Minister Atal Bihari Vajpayee's Bharatiya Janata Party-led alliance getting 230 to 250 seats, less than the 272 needed for a majority in the 543-seat parliament. The result was lower than a previous forecast of 245 to 265 seats. Vote counting commences tomorrow, with results expected the same day.

　　"Stocks could lose as much as 10 percent from the current levels," said Paras Adenwala, who manages the equivalent of US$2 billion for Birla Sun Life Asset Management Ltd in Mumbai.

　　(Bloomberg News)