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Tokyo opens lower on tech weakness

Sony
Sony shares tumbled, helping to drag the Nikkei down on Wednesday  


TOKYO, Japan -- Tokyo shares opened lower Wednesday as enthusiasm over the $25 billion Hewlett-Packard merger with Compaq faded.

U.S. technology stocks fell on Wall Street Tuesday, taking the Nasdaq down 34.65 points or 1.9 percent to 1770.78. The Dow industrials rose 47.74 points to 9997.49.

In Tokyo, the tech-sensitive Nikkei 225 share average dropped 285.16 points or 2.63 percent to 10,488.99. The broader TOPIX index lost 22.63 points or 2 percent to 1,077.69.

Australia cuts cash rate to 4.75%

Elsewhere in the region, Australia's benchmark S&P/ASX200 dropped 12.2 points or 0.37 percent to 3274.2 after the Reserve Bank cut the cash rate by a quarter of a percentage point to 4.75 percent.

In Seoul, the Kospi was down 5.75 points or 1 percent to 553.05. Hynix Semiconductor was slightly weaker, as was Samsung Electronics.

In Tokyo, the Nikkei was dragged down by a 2.46 percent loss to 5,150 yen by consumer electronics giant Sony Corp.

The Japanese market had rallied almost 3.5 percent on Tuesday, with investors encouraged by gains in Nasdaq futures after the takeover news.

'Too excited' about merger news

"We were too excited about the news concerning Hewlett-Packard and had not expected a fall in the Nasdaq," said Tsuyoshi Segawa, equity strategist at Shinko Securities.

A surprisingly strong gain in the National Association of Purchasing Management's monthly index of manufacturing activity had only a limited impact on U.S. shares although it somewhat eased concens about the ailing U.S. economy.

"The sentiment in the U.S. is so weak that people are more sensitive to the negative side of any news," Segawa said.

Japanese media reports that the Cabinet Office told officials of the ruling Liberal Democratic Party that the domestic economy was likely to have shrunk around 1.2 percent in the April-June period were largely shrugged off.

A contraction in the quarter has been widely expected and market participants are more focused on how the government will deal with it, analysts said. The figure will released Friday.

Electronics parts maker Kyocera Corp was ask-only at 8,090 yen, down 3.58 percent from the previous close, after a report that the company is to cut by almost 40 percent its capital expenditure plans for the year ending in March 2002.

Reuters contributed to this report.








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