TOKYO -- Asian equity markets started the week on a solid footing, as investors slowly bought back key tech shares they had been selling off the past few months.

The

Group of Seven

finance ministers' meeting held over the weekend in Japan delivered little in substance, but with the late-July G8 summit (dubbed the Information Technology summit, some traders said the overabundance of IT-related headlines actually may have helped sentiment in the Tokyo tech sector Monday.

The

Nikkei 225

index rose 174.44, or 1.0%, to 17,572.68, while the

Topix

index, which includes all shares listed on the

Tokyo Stock Exchange's

first section, climbed 16.53, or 1.0%, to 1613.89. The

Jasdaq

small-cap index gained 1.18, or 1.4%, to 88.41, while the Nikkei

over-the-counter

index rose 14.78 to 1805.44.

Tokyo traders predicted a very slow trading week, since investors are waiting around for next Monday's

Bank of Japan

monetary policy board meeting. The market is still very split on whether the central bank will lift the overnight call loan rate by 25 basis points or not. In the meantime, a mild tech rally has some traders hoping the Nikkei 225 will reach key psychological resistance of 18,000 this week.

The G7 meeting resulted in finance ministers agreeing to push for more cooperation in the IT sector, although they also warned that new innovations would not immediately result in a gain in productivity or higher living standards.

And with local papers packed with IT-related headlines, the market reacted with mild optimism. Large cap tech shares were mixed, with

NEC

(NIPNY)

rising 100 yen or 3.2%, to 3250 ($30.40) and

Sony

(SNE) - Get Report

rising 200, or 1.8%, to 11,180.

Hitachi

(HIT)

fell 20, or 1.4%, to 1380, while

Fujitsu

gained 40, or 1.2%, to 3490.

Nippon Telegraph & Telephone

(NTT)

rose 20,000, or 1.3%, to 1.56 million as the market got excited over the possibility that the U.S. and Japan will strike a deal soon to lower the telecom monopoly's high interconnection fees. Talks between the two sides started today.

The greenback fell lower against the yen after Japan's May machinery orders jumped 4.5% from the previous month, much higher than the market's expectation of a 1.7% increase. The dollar recently fetched 106.90 yen.

Hong Kong's

Hang Seng

index jumped 408.71, or 2.4%, to 17,238.67 largely on a telecom sector rally.

Hutchison Whampoa

gained HK$1.00, or 1.0%, to 110.50 ($14.17) after reports suggested that it may buy out India's

Usha Martin Telekom

. If the buyout is approved, Hutchison would bypass India's stringent restriction on foreign ownership of state telecom companies.

China Mobile

(CHL) - Get Report

, formerly known as China Telecom, rose 1.75, or 2.4%, to 74.25, while

China Unicom

(CHU) - Get Report

gained 0.45, or 4.4%, to 10.80.

Korea's

Kospi

index climbed 9.73, or 1.2%, to 851.47, despite the possibility of an imminent banking sector strike. Bankers are not pleased with the government's recent proposals on banking sector reforms.

Elsewhere in Asia, Taiwan's

TWSE

index fell 18.41 to 8154.67.