HONG KONG -- Asian stocks rose for a second day on Thursday, surprising some traders who had expected a retrenchment after yesterday's stellar performances. Having been severely beaten back last week, stocks still looked appealing, with Japanese fund managers continuing to pick up blue chips.

The key

Nikkei 225

index rose 361.85 points, or 2.2%, to 16,694.30, while the

Topix

index, which includes all shares listed on the

Tokyo Stock Exchange's

first section, rose 19.14 to 1541.98. The

Jasdaq

small-cap index gained 0.37 or 0.4% to 86.08, and the Nikkei

over-the-counter

index fell 4.56 or 0.3% to 1745.45.

Sony

(SNE) - Get Report

was unchanged at 9750 yen, after the

Nihon Kezai Shimbun

reported that the company and Sony Computer Entertainment would invest an additional 130 billion yen ($1.2 billion) to develop chips for PlayStation2 video games.

Fujitsu

(FJTSY)

rose 30 or 1% to 3080, while

Nippon Telegraph & Telephone

(NTT)

was up 20,000 or 1.8% to 1.3 million.

NTT DoCoMo

(NMCNY)

rose 10,000 or 0.4% to 2.79 million.

Softbank

rose 700 or 4.2% to 17,200, as investors cheered the news that the company might not be taking over the failed

Nippon Credit Bank

, after the expiry of the Softbank consortium's exclusive rights to negotiate the purchase.

Hikari Tsushin

tumbled 1000 or 19.6% to 4100, after yesterday's news that another of its marketing agents has gone bust.

In Hong Kong, the benchmark

Hang Seng

index bounced around, but then strengthened toward the finish, closing up 227.33 points or 1.6% at 14,941.19. Market watchers had expected a flat or down day after Wednesday's 5% rise, but short sellers were forced to cover in the afternoon, driving stocks higher.

Developer

Cheung Kong

(CHEUY)

rose HK$3.50 or 4.9% to 74.75, while its affiliate

Hutchison Whampoa

(HUWHY)

was up 3.25 or 3.3% to 93.25.

China Telecom

(CHL) - Get Report

rose 0.50 or 0.9% to 58.75.

Pacific Century CyberWorks

rose 0.05 or 0.3% to 15.25, and its takeover target

Cable & Wireless HKT,

(HKT)

fell 0.10 or 0.6% to 17.90.

South Korea's

Kospi

index was up 6.61 points or 0.9% to 738.49, amid continuing confusion over who is in charge of the

Hyundai Group

of companies. Yesterday, the company said that the founder and his two sons would resign from operating various group companies, but one son has rebelled and has said he will stay on. Most Hyundai group companies fell, while

Samsung Electronics

rose 7000 won or 2.3% to 315,000.

SK Telecom

(SKM) - Get Report

rose 21,000 or 5.5% to 406,000.

Taiwan's

TWSE

index fell 96.89 points or 1.1% to 8842.63.

In currency trading, the dollar rose against the yen amid new problems in Japan's financial industry, after the forced closure of

Daihyaku Mutual Life,

which was announced Wednesday. Today,

Kyoei Life

announced that it would allow the Prudential group to take a controlling stake in it. The dollar recently fetched 108.66 yen, with further gains checked by sales of dollars on the part of Japanese exporters.