ASIA REPORT: Nikkei:8,726.34 (+18.35) Hang Seng:14,840.42 (–418.43) Values at yesterday's close

JAPAN’S NIKKEI average closed up just 0.2 per cent yesterday, giving up earlier gains as other Asian stocks fell on concerns about swine flu in Mexico.

Chugai Pharmaceuticalrallied 14 per cent on expectations of a pick-up in flu-drug sales, while Shinsei Bankand Aozora Bankzoomed ahead after sources said they were in merger talks.

Chugai and Shinsei pushed the Nikkei up in the morning, but analysts said fears of a global flu pandemic dampened investor confidence. Chugai, which distributes the flu drug Tamiflu through its partnership with developer Roche, soared 14 per cent to 1,845 yen. Fujibo Holdings, a manufacturer of cotton, synthetic and wool products, including medical masks, gained 7.1 per cent to 90 yen.

However, stocks in travel-related businesses fell, with Japan Airlinesshedding 4 per cent to 191 yen, and All Nippon Airwayssliding 5.2 per cent to 347 yen.

Hong Kong stocks fell after the Financial Times said Industrial & Commercial Bank of China (ICBC)shareholders will sell stock in the company. It slid 5.9 per cent. Cathay Pacific Airwaysdeclined 8 per cent. – (Reuters/Bloomberg)