Asia Watch

By THIS IS MONEY
Updated:

 

Far-East markets moved sharply lower as Wall Street's overnight fall prompted a wave of profit-taking, particularly on high flying hi-tech stocks.

Rising US bond yields rekindled fears of inflation and interest-rate increases, a sentiment which had its biggest impact in Hong Kong, linked to the US economy through its currency peg.

The blue-chip Hang Seng went to the mid-session break down almost 3%, or 467.64 points, at 15,192.28, slightly up from the session low.

Blue-chips Hutchison Whampoa, China Telecom and Cable & Wireless HKT came in for much of the selling, all of them down by more than 3%.

Other telecoms counters were also in focus after the government yesterday awarded 17 new licences for fixed network services. The announcement had a positive impact on satellite operators on expectations that the move would increase transponder demand. Shares in APT Satellite were launched 31% higher. AsiaSat was up 10%.

BT's Hong Kong interest SmarTone, one of the successful applicants, saw its share price slip 50 cents to HK$34.10. BT paid HK$25 a share when it bought a 20%stake in the company in April last year.

The market was also in reverse gear in Tokyo, where the Nikkei 225, which hit a 29 month high of 19,437 on Monday, fell through the 19,000 points barrier today. The Nikkei closed 298.82 lower at 18,897.75.

In addition to the global trend, brokers said some corporate and institutional investors were unwinding cross-shareholdings ahead of the end of the financial year in March.

Indices for 23 of the market's 33 business sectors were lower, and losers exceeded gainers by about seven to four. Hardest hit was the information and technology sector, down 2.9%, while the electronic machinery sector lost 2%.

Among active stocks, Internet portal Yahoo! Japan moved up on the over-thecounter market to become Japan's first 100 million yen share. Shares in leading stake-holder Softbank did not benefit, falling 5%.

Pharmaceuticals firm SSP was up more than 10% after Germany's Boehringer Ingelheim yesterday moved to increase its stake. Shares in small-business lender Nichiei slumped more than 15% on reports that regulators were set to demand a one-year freeze on the company's business.

Elsewhere in the Far East, the biggest move came in Jakarta, where religious violence on the resort island of Lombok is sapping market sentiment. The Composite, which broke through 700 points on Monday, was off 20.50 at 665.21.

Virgin Airways' entry into Australia's domestic market, and the possible involvement of new partner Singapore Airlines, continued to have an impact in Australasia. In Wellington, shares in Air New Zealand, a half owner of Australian domestic player Ansett, were down again, with the foreign tranche shares losing 2%.

In Sydney, BA interest Qantas said it was still considering a no-frills airline to meet the Virgin challenge. Qantas shares were up four cents at A$3.89. Australia's All Ordinaries fell 46.20 to 3105.00.

The Taiwanese market repeated its pattern of opening higher and reversing, the Composite 98.75 lower at 9151.44, while Korea's Kospi was down 28.20 at 953.56.

Malaysia's Composite shed 4.37 to 945.25, while Thailand's SET was in positive territory, up 2.24 at 486.40.

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