Sun's eclipse casts long shadow

By RAY HEATH
Updated:

 

SUN Microsystems cast a shadow across Asian stock markets today. Technology stocks around the region fell after the US group cut its fourth-quarter earnings forecasts.

Nasdaq's 3.4% fall, which came before the Sun announcement, amplified the tremors that went through Asia's chip stocks.

Sun's statement, which wiped 7% off its share price, was seen as bad news for long-term demand for chips and equipment suppliers, which has grim implications for regional exports and economies.

Tokyo's Nikkei 225 tumbled 280.54 points to 13,493.35 as foreign investors dumped chip heavyweights such as NEC and Tokyo Electron, which dived as much as 5%.

A similar sucking sound of foreign money leaving was heard in Korea's semiconductor-heavy market, where the Kospi retreated from a recent eight-month high, and lost 3.63 to 628.42.

The damage would have been worse but for General Motors' imminent bid for ailing Daewoo Motor Sales, which is expected to involve a debt-for-equity bail-out deal with the group's creditors.

China-related technology plays led Hong Kong's Hang Seng index down 209.48 points to 13420.13. Legend Computer, the mainland's largest supplier of PCs, and China Mobile, its largest cellphone operator, led with early losses of around 2%. HSBC Holdings continued to retreat, and dropped 75 cents to HK$97.75 cents on growing pessimism about its US earnings.

Reports that Taiwan's Chunghwa Telecom was about to issue a further tranche of stock at a price below its recent initial public offering added to the semiconductor woes, and the Weighted Average lost 38.19 points to 5057.07.

Singapore's Straits Times index drooped 19.51 points to 1662.74, pulled down by leading chipmakers reacting to Nasdaq's overnight falls. Telecoms stocks were also hit by Vodafone's decision not to enter the bidding for MobileOne, the city's second-biggest cellphone operator.

Falling metal prices hurt Australian resources stocks, and with News Corp's shares tumbling on concern about US earnings, the All Ordinaries index slipped 8.5 to 3339.9.

Worries about the impact of declining Japanese industrial production on demand for raw materials, which has hit the price of copper and other metals, sent the All Mining index down 1.84% by noon. Biggest losers were MIM Holdings, down almost 4%, and Rio Tinto, which fell 1.3%.

News Corp lost almost 2% as investors fretted about falling advertising revenues in the US.

Indonesian stocks remained remarkably calm despite fears of violence as supporters of embattled President Abdurrahman Wahid poured into Jakarta. The Jakarta Composite was steady at 408.93, up 2.54 before today's Parliamentary session called for his impeachment.

The dismissal of Thailand's Central Bank governor following public rows over interest rates policy with Prime Minister Thaksin Shinawatra had little impact on the stock market. Prospects of takeover activity pushed the SET up 0.71 to 310.18.

Malaysian stocks recovered from early falls triggered by a 5% plunge in the price of Malaysian Airline Systems after it announced that loses rose 500% last year. The Kuala Lumpur Composite steadied at 570.68, up 3.06 points.

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

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