Asia Watch

By RAY HEATH
Updated:

 

There was only one way Asian stocks were going today after Microsoft topped the recent list of heavyweight technology stocks to issue profit warnings.

This and the resulting 3.3% fall on Nasdaq sent markets tumbling. Tokyo slumped more than 2.5% as the Nikkei 225 plunged 374.9 points to 14552.29, while Taiwan and South Korea lost more than 1% as investors retreated.

Hong Kong was also hit by a plunge in HSBC Holdings stock after the Bank of England's warning about banks' long term exposure to telecommunications companies in Europe. Earnings warnings from the betrothed JP Morgan and Chase Manhattan hit other local banks.

There was nowhere for investors to run or hide in Hong Kong. Technology and telecommunications stocks were mangled by Microsoft; banks were battered by the HSBC concerns, and property stocks were pummelled by disappointing land sale prices.

HSBC fell HK$4 to HK$112.50, reflecting its overnight weakness in London, as the Hang Seng index crashed 474.65 points to 15022.34. Former high-fliers in the mainland telecoms sector, China Mobile and China Unicom, lost more than 2%, and leading computer groups Legend Holdings and Founder fell as much as 4%.

The worsening outlook for computers and component sales inflicted more pain on a Tokyo market already facing the prospect of a lurch back into recession next year. Top computer-related stocks Fujitsu and NEC recorded losses of up to 4% on the local implications of Microsoft's warning.

Taiwan's electronic stocks had problems of their own following a downgrading of Morgan Stanley Dean Witter earnings estimates for giant chip-maker United Microelectronics. The stock fell 1%, while big rival Taiwan Semiconductors dropped more than 2%, prompting a 95.42-point slide to 5224.74 in the Weighted index.

South Korea's market gained little benefit from the expected granting of third-generation telecom licences to SK Telecom and Korean Telecom, which had already been run up in anticipation of the award. Leading chip-maker Samsung electronics led the fall in technology stocks that knocked the Kospi down almost 2.5% or 13.38 points to 534.

Some early resilience in Singapore quickly faded as investors decided that the local market had not yet discounted all the bad news. The Straits Times index was dragged down 22.4 points to 1958.14 by technology stocks.

A 12.98-point fall to 699.52 by Malaysia's Kuala Lumpur Composite index was inflicted by unsettled blue-chips and technology-related stocks alike.

Thailand and Indonesia were the only two Asian markets not drenched in red ink. Thailand's SET edged up 2.42 points to 273.7 on some year-end window-dressing, while buying of second-line Indonesian stocks helped the Jakarta Composite add 2.21 points to 421.41.

In Australia, warnings on Wall Street wiped 1.4% off Sydney stocks and the All Ordinaries index crashed 45 points to 3178.1. News Corporation fell to within sight of its year's low with a 67-point dive to A$14.92, borne down by factors ranging from threatened ratings downgradings to concerns over its finances.

• 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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