Asia shares defy post-quake gloom

Indonesian, Indian and Hong Kong stock markets reached record highs.

Investors seemed to feel that some of the worst-affected areas were so under-developed that the tragedy would have little impact on Asia's listed firms. "Obviously with a lot of loss of life, a lot of time is needed to clean up the mess, bury the people and find the missing," said ABN Amro's Eddie Wong. "[But] it's not necessarily a really big thing in the economic sense."

India's Bombay Stock Exchange inched slightly above its previous record close on Wednesday. Expectations of strong corporate earnings in 2005 drove the Indonesian stock exchange in Jakarta to a record high on Wednesday. In Hong Kong, the Hang Seng index may be benefiting in part from the potential for its listed property companies to gain from rebuilding contracts in the tsunami-affected regions of South East Asia. In Sri Lanka, some economists have said that as much as 1% of annual growth may be lost. Sri Lanka's stock market has fallen about 5% since the weekend, but it is still 40% higher than at the start of 2004.

Thailand may lose 30bn baht (£398m; $768m) in earnings from tourism over the next three months, according to tourism minister Sontaya Kunplome.

In the affected provinces, he expects the loss of tourism revenue to be offset by government reconstruction spending. Thailand intends to spend a similar sum - around 30bn baht - on the rebuilding work. "It will take until the fourth quarter of next year before tourist visitors in Phuket and five other provinces return to their normal level," said Naris Chaiyasoot, director general at the ministry's fiscal policy office. In the Maldives the cost of reconstruction could wipe out economic growth, according to a government spokesman. "Our nation is in peril here," said Ahmed Shaheed, the chief government spokesman. He estimated the economic cost of the disaster at hundreds of millions of dollars. The Maldives has gross domestic product of $660m. "It won't be surprising if the cost exceeds our GDP," he said. "In the last few years, we made great progress in our standard of living - the United Nations recognised this. Now we see this can disappear in a few days, a few minutes." Shaheed noted that investment in a single tourist resort - the economic mainstay - could run to $40m. Between 10 and 12 of the 80-odd resorts have been severely damaged, and a similar number have suffered significant damage.

However, many experts, including the World Bank, have pointed out that it is still difficult to assess the magnitude of the disaster and its likely economic impact. In part, this is because of its scale, and because delivering aid and recovering the dead remain priorities. "Calculators will have to wait," said an IMF official in a briefing on Wednesday. "The financial and world community will be turning toward reconstruction efforts and at that point people will begin to have a sense of the financial impact."