Asia Watch

By RAY HEATH
Updated:

 

Any hopes of Asia's battered stock markets springing back to life on expectations of lower US interest rates were quickly shattered as an overnight plunge on Nasdaq triggered a regionwide dumping of technology stocks.

A dive of more than 7% on Nasdaq sparked falls of up to 2.5% in Asia's markets.

Another round of earnings downgrades in the US drove home the message that the outlook for Asia's chipmakers and other components suppliers is worsening by the week.

Warnings that a hard landing for the US economy will hit Asia are taking over from earlier theories that interest rate cuts by the Federal Reserve this month would be a boost to the region.

In Singapore, Taiwan and South Korea, chip-makers and component suppliers were again in line of fire, while in Hong Kong, telecoms companies took some of the biggest hits, as the Hang Seng index lost 280.36 points to 14,589.58. Tokyo was again closed.

In Taipei the Weighted index dived 40.49 points to 4894.79, as heavyweight chipmakers Taiwan Semiconductor and United Microelectronics crumbled.

Major casualties in South Korea included Samsung Industries, the world's No 1 chipmaker, and rival Hyundai Electronics, which both dropped more than 3%. The Kospi edged up 0.48 to 521.43.

Among the biggest losers in Hong Kong were mobile phone operators, China Mobile and China Unicom, but blue-chip banks and property companies, which had enjoyed a year-end run on interest rate hopes, were also hit. HSBC Holdings lost HK$1.50 to HK$111.50, and property giant Cheung Kong was down HK$1.50 to HK$98.

The Nasdaq bloodbath inevitably washed over Singapore's technology stocks, which led the Straits Times index down 34.76 or 1.83% at 1861.52. The former stars of the Singapore electronics sector reeled although trading levels were low. Biggest losers included major chipmaker Chartered Semiconductor and electronics group Omni Industries, which rely on the US for around half of their sales.

The concerns over the US economic outlook and local interest rate rises combined to slice 9.11 points off the Kuala Lumpur Composite index, which closed at 657.52.

Thai markets were mixed, despite a minor pre-election boost as speculators picked up stocks related to premiership candidate and tycoon Thaksin Shinawatra and his family. The SET index closed on 272.03 points, up 2.84.

Politics clouded Indonesia's markets following the resignation of a senior member of embattled President Abdurrahman Wahid's Cabinet, and the Jakarta Composite fell 4.38 points to 405.83.

Nasdaq was a dirty word in Sydney as anything with a hint of a link to technology was hammered. The All Ordinaries index retraced half of yesterday's 1.6% gain, and fell 24.90 points to close at 3180. Rupert Murdoch's News Corp, which is always sensitive to Nasdaq shifts, tumbled more than 3%.

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

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