HONG KONG -- Markets in Hong Kong and Japan fell on Monday over heightened U.S. recessionary fears, but China and India, the less-mature emerging market giants, continued to buck the bearish trend by delivering modest gains.

The Hang Seng recovered half its morning losses by the close, but dropped 340 points, or 1.2%, to 27,179, while China's Shanghai Composite Index rose 31 points, or 0.6%, to 5393.

Volumes on the Shanghai Composite Index were 161.4 billion yuan, or $22.2 billion, which is about 2.5% shy of levels in October 2006, when the market reached a record high, while the Bombay Sensitive Index gained 108 points, or 0.5%, and hit an all-time high of 20,795. Indian shares were led higher by ICICI Bank ( IBN), which leapt 4.7%, to 1,285 rupees, after investors looked for bargains in the day's early dip.

In Taiwan, the Taiex tumbled 338 points, or 4%, to 7883, as dealers said they were unloading heavy positions in electronics stocks like Hon Hai Precision ( HNHPF) and Taiwan Semiconductor Manufacturing ( TSM), on anticipation of weaker orders, Hon Hai Precision fell 6.3%, to T$171.50, while Taiwan Semiconductor Manufacturing plunged 7%, to T$55.80. The South Korean Kospi fell in line with other Asian markets, down 1.8%, to 1831.

"Hong Kong is more likely to benefit from China, and more likely to be hurt from the U.S. right now," says Richard Lee, an analyst at Core Pacific Yamaichi in Hong Kong. "In China, you're dealing with a different group of investors who are more concerned with China itself, and who think the economy can benefit from the Olympic games."

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