As war broke out in the Gulf, strategists were poring over their history books to guide investors. Their tips: Buy technology and consumer stocks.

They say it's time to buy technology, consumer cyclicals and real estate -- the best performing sectors after the 1991 Gulf war -- and to lighten up on insurance, utilities and automobile stocks. Securities and banking stocks also stand to gain from a quick war and a subsequent equity market rally.

"Whilst history may not repeat itself, it certainly rhymes," Raymond Foo, regional strategist at BNP Paribas Peregrine Securities in Hong Kong, said.

Technology stocks soared about 56 per cent, consumer cyclicals 28 per cent and real estate 25 per cent in the three months after the first Gulf war, according to BNP.

Asian investors scooped up shares in battered brokerages on Thursday, as hopes for a market rebound strengthened. The pall of uncertainty had helped send Tokyo stocks to a 20-year-low, and Korean shares to a 17-month-low in recent weeks.

Notable winners included industry leader Nomura Holdings Inc in Japan and brokerages like Hyundai Securities in South Korea. The Korean market -- Asia's worst performing in the last 12 months -- gained almost 5 per cent.

Some are sceptical of a post-war relief rally amid worries over economic weakness in the United States, possible terror attacks and tensions over North Korea.

"Any complications in the war would hit sectors like consumer electronics that are highly dependent on US consumer spending," said Koji Muneoka, head of domestic sales trading at HSBC in Tokyo. "I'd also be steering well clear of shares in airlines and travel agencies for obvious reasons."

The best-case scenario

If war is over by the end of April, markets and sectors geared to falling oil prices such as transport and paper companies should outperform, equity strategists said.

"If the first Gulf War is indicative of market psychology, we could see a sharp bounce from the current lows within weeks of the start of a US attack on Iraq to close the 'war discount'. The discount is around 20-25 per cent," Foo said.

Sectors such as pulp and paper which benefit from a lower price of oil, were big winners in Japan on Thursday. Japan's number-two paper maker, Oji Paper Co Ltd jumped 3.75 per cent to 470 yen after front-month US crude oil futures hit three-month lows on Thursday.

China's Zhejiang Expressway Co Ltd, COSCO Pacific Ltd, Hong Kong's Wharf (Holdings) Ltd, Taiwan's TSMC, South Korea's Samsung Electronics Co, Singapore's Venture Manufacturing and Thailand Land and Houses Plc are BNP's favourites.

US investment bank J P Morgan said it's time for investors to make a switch into high beta stocks -- stocks that move step-in-step with the overall market.

Australia's BHP Billiton, Rio Tinto and News Corp were expected to be winners from a recovery in global economic growth.

Two roadmaps

Investors have sought exposure to property ,infrastructure and utilities -- favoured for their stable share price and high dividends -- to hedge their bets and protect billions of dollars worth of already wilted portfolios.

"Our existing model portfolio is much more conservatively positioned, focusing on markets that are relatively insulated from slowing global growth," said Spencer White, head of regional equity strategy at Merrill Lynch.

Stocks favoured for their mix of high dividends and exposure to world growth included Japan's largest oil refiner Nippon Oil Corp, Malaysian power company Malakoff Bhd, and New Zealand's Contact Energy.

Dividend yields in Asia outside of Japan have exceeded those in the United States in the past five years. Asian stocks on average offer dividend yields of 3.5 per cent compared with about 1.9 per cent for US stocks, 1.2 per cent in Japan, and 4.1 per cent in Europe, ING Financial Markets says.

But if you believe in a quick, clean outcome, then the preferred sectors across the region would be tech, consumer discretionary and banks at the expense of energy, materials and utilities, Merrill Lynch's White said.

Cautious investors should stick with China, strategists advised.

"China's the favourite at the moment and it will stay the favourite -- it's got the highest growth rate and a huge amount of foreign investment going through," said Sydney-based Michael Wilson, chief investment officer at Ausbil Dexia.

"The tiger economies are linked more to the US as far as exports go, so they will be more impacted by the economic factors than by the war factors," he said.