Asia watch

By RAY HEATH
Updated:

 

ASIAN markets fought off a panic attack after Wall Street and Nasdaq slid by nearly 3% overnight. Trading in Tokyo was subdued ahead of the latest economic report from the Bank of Japan which concluded that no end to the recession was in sight, and that a further deterioration in the economy was inevitable.

The assessment was reinforced by a Reuters poll that predicted a decline of 1.1% in the country's gross domestic product this year. While the Nikkei 225 came close to breaching the 10,000 level in early trading, it struggled back to close at 10,128.180, down 49.4.

Hong Kong staged a late rebound, ending ahead 49.8 at 11,013.8, after slipping below 11,000 on Wednesday for the first time since mid-November.

Investors in the region were still digesting mixed signals hitting the market, Intel's warning that it was to cut investment by 25% weighing down on technology shares, and a bullish outlook from brokers Merrill Lynch discouraging a major exodus. Merrill investment director Graham Bamping said the US economy was set to bottom out at the end of the current quarter, while return on equities would reach 10% this year, outperforming cash and bonds.

Japanese banks failed to cheer a rescue package for the struggling Daeie supermarket chain under which big lenders will retire much of the debt to the group. This left major banks down by as much as 2% as this move will add to their enormous debt problems.

HSBC Holdings weighed on the Hang Seng with a fall of HK$1 to $88 and according to some local brokers' estimates, the decline will continue until the stock hits $85 as pressure on earnings mounts from sluggish lending, and the Argentinian risk factor remains.

Early dips in Taiwan and South Korea were reversed in later trading to put both markets marginally ahead. Profit-taking was offset by bargain-hunting among those who believe that after a period of consolidation the only way is up again.

South Korea's Kospi index rose 2.55 points to 713.5, although Samsung Electronics sank more than 2% after disappointing profit figures on Wednesday. In Taiwan, the market shook off falls in chip stocks and the Weighted Average recovered to a gain of 12.8 points at 5501.13.

Singapore stocks were hit by Wall Street's falls and by receding prospects of an exportled recovery, and the Straits Times index fell 14 points to 1660.5. News Corporation continued to be the millstone round Sydney's neck, as last year's late confidence in Australia that advertising revenues in the US were about to recover continued to fade, and the stock lost 2.6%.

The All Ordinaries index closed 31 points down at 3336.2. The fall would have been much more severe but for a bout of buying of gold mining and other resource stocks on hopes and rumours of more takeover action in the sector.

Smaller South-East Asian markets were hurt by Wall Street's decline. Malaysia's Kuala Lumpur Composite index fell 6.1 points to 694.52, Thailand's SET index dipped 1.88 to 317.69, and in Indonesia the Jakarta Composite lost 2.91 at 420.67.

• Prices and indices in this section are supplied from various sources and calculated at different times and may not always match those listed on the site.

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