S Korea shares hit record highs

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Shares in South Korean firms have reached all-time highs, lifted by rare conciliatory comments made by the North Korea leader Kim Jong-il.

In remarks to China's Foreign Minister Yang Jiechi, he is reported to have urged progress on the dismantling of the country's nuclear programme.

This helped send the South Korean Kospi index up 1.82% to a record close of 1,838.41 points.

Most other Asian markets also rose, except China, where shares lost 2.14%.

Mr Kim's comments that tensions on the Korean peninsula were easing, reported by China's official Xinhua news agency, gave fresh hopes that the country's main nuclear reactor at Yongbyon - long the cause of international concern - would be shut down as agreed earlier this year.

Biggest beneficiary

Neighbouring South Korea was the biggest beneficiary of investor sentiment, with Kookmin Bank and Samsung Electronics, a big exporter and key chip provider of Apple's iPhone, both advancing.

Thailand's main stock index also continued to rise. On Tuesday, it beat the level it peaked at before the region's 1997 financial meltdown, sparked by the devaluation of the Thai currency.

And Hong Kong's Hang Seng index ended on record highs for a second day, up 67.41 points at 22,218.55.

The only loser in the region was China, where shares, hit recently by government measures to curb excess liquidity in the economy and threats of higher interest rates, continued to slide.

The main Shanghai Composite Index closed down 2.14% at 3,816.165 points - a one-month low - as an increasing number of state-owned firms seek to issue more shares, threatening to weaken the value of existing stock.