ASIAN bourses were trapped in a narrow range of trading yesterday, with investors adopting a wait-and-see approach as the greenback stabilised against the region's currencies.

Blue chips did their best to rally - and they did manage to get the benchmark Straits Times Index (STI) up by 13.75 points to 2,758.79 - but other Asian markets were mixed.

China's Shanghai Composite Index rose by 0.53 per cent, Hong Kong's Hang Seng Index fell by 0.86 per cent, while Tokyo's Nikkei 225 was down by 1.32 per cent.

The local bourse enjoyed a boost from a government survey showing that the economy grew 0.6 per cent in the third quarter.

Traders were also cheered by the new official economic growth forecast of 3 per cent to 5 per cent for next year.

Local lenders were among the first to benefit. OCBC Bank rose by 10 cents to $8.46 on a volume of 4.47 million shares, while United Overseas Bank gained 12 cents to $19.50. DBS Group Holdings was up by two cents at $14.60.

The brighter economic outlook also lifted some property developers. City Developments rose by 16 cents to $10.36, and United Overseas Land edged up two cents at $3.49.

But while they welcomed the higher prices commanded by blue chips, dealers expressed concerns over the way overall trading activities had been declining.

About 1.28 billion shares worth $1.25 billion changed hands yesterday - roughly one-third below last month's daily average volume - as investors refused to move from the sidelines to make fresh stock purchases.

The quiet market conditions also took a toll on the Singapore Exchange, which slipped seven cents to $8.04 on a volume of 4.14 million shares.

Some brokerages suggested that the inactivity was underpinned by fears that a market correction was looming.

DBS Vickers noted that traders might be wary of the STI approaching 2,800 points soon, as short-term indicators suggested that stocks were 'at overbought levels, following recent gains'.

It advised investors to accumulate stocks with the index at '2,700, or even better, slightly below that, with 2,970 as the objective for the first quarter of next year'.

Still, despite the quiet market conditions, sexy stories could still stir traders into action.

GuocoLand, linked to Malaysian billionaire Quek Leng Chan, rose by three cents to $1.93 after announcing that it would sell an office tower in Shanghai for one billion yuan (S$203 million).

Mr Quek has also been making waves in Hong Kong after raising his stake in Bank of East Asia, sparking talk that he may launch a bid for the rest of the bank.

Hong Leong Asia, controlled by his cousin Kwek Leng Beng of the Singapore Hong Leong group, surged 28 cents to $2.59, after revealing that it was having discussions with investment banks to evaluate offers for its Xinfei unit, which manufactures refrigerators and freezers.

engyeow@sph.com.sg