Asian Tech Stocks Mauled on Nasdaq Fallgreenspun.com : LUSENET : Grassroots Information Coordination Center (GICC) : One Thread
Wednesday October 11 2:52 AM ET
Asian Tech Stocks Mauled on Nasdaq Fall
By Valerie Lee
SINGAPORE (Reuters) - Asian stocks staggered in negative territory on Wednesday as Nasdaq woes battered technology and telecoms sectors in Japan, Singapore and Taiwan and forced a halt in Korea's benchmark index futures contracts.
Tokyo's benchmark Nikkei average ended at an 18-month low, finishing down 1.98 percent at 15,513.57. It briefly fell two percent to 15,511.75, its lowest level since July 31.
``Some of the selling in Japan might look a bit overdone with even the more defensive issues being sold, but nobody's in the mood to buy since the Nasdaq looks like it's headed even lower and U.S. investors are pulling their money out of Japan,'' said Katsuhiko Kodama, head of equities at Toyo Securities.
U.S. technology stocks suffered badly on Tuesday, revisiting lows not seen since May. Investor fears that the computer chip market was slowing dragged down key semiconductor stocks.
The tech-heavy Nasdaq composite index, reflecting sales in semiconductor, computer and software companies, fell more than 3.40 percent to close at 3,240.53, putting it near this year's closing low of 3,164.55 set on May 23.
The Dow Jones Industrial average shed 0.42 percent, to close at 10,524.40, dragged lower by its technology components.
In Asia, along with the Nikkei, market indices in Hong Kong, Singapore and Taiwan fell by more than two percent by afternoon trade, while South Korea's benchmark KOSPI index tumbled 5.30 percent to 557.18, dragged down by index heavyweight Samsung Electronics.
The Korea Stock Exchange on Wednesday temporarily halted trade of KOSPI 200 futures contracts at 0048 GMT due to sharp losses.
Orders were halted for five minutes and trade began again after 15 minutes.
Major currencies turned quiet after early short-covering and profit-taking ran its course leaving the dollar soft, the euro firmer and the yen somewhere in between.
Dealers said attention was fixed on equity markets with the U.S. dollar becoming increasingly discomfited by the weakness in U.S. equities.
By 0640 GMT, the dollar was trading at 107.91/96 yen and at $0.8730/35 against the euro.
In Europe, technology shares were also expected to be hit following Nasdaq's retreat and the host of after-hours results from leading companies including Lucent Technologies Inc
JAPAN- LOSSES AHEAD?
Traders in Tokyo said further losses in U.S. technology shares would spur more U.S. investors to sell their Japanese shareholdings to cover losses at home.
Some said slower growth at U.S. chipmakers could signal what lies ahead for Japan's semiconductor industry. Chip and electronics maker NEC Corp and Fujitsu Ltd. were among the losers for the day.
Fear of further falls was also the order of the day in Taiwan, where brokers expressed concern the market would hit the skids on Thursday after the government restores the daily downward limit to seven percent after halving it to 3.5 percent recently.
They said the government's T$500 billion (US$16 billion) National Stabilization Fund, activated on October 3, would support the market, but could do little to boost sentiment depressed by Wall Street and specifically, Nasdaq weakness.
Taiwan's microchip shares, the most heavily weighted stocks, fell sharply on the weakness of their U.S. counterparts and world microchip foundry leader Taiwan Semiconductor Manufacturing Co ended at its limit down level at T$104.
The TAIEX ended down 2.72 percent at 6,040.55.
Singapore's Straits Times Index heavyweight, chipmaker Chartered Semiconductor Manufacturing, plunged over 10 percent to a year low. The STI had slumped 3.30 percent in early trade.
-- Carl Jenkins (Somewherepress@aol.com), October 11, 2000