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War qualms cause Asia to close off
By Alex Frew McMillan
HONG KONG, China (CNN) -- War jitters saw Asian investors start the week in a selling mood Monday, driving markets to a sharply lower close. Japan, South Korea, Hong Kong, Taiwan, New Zealand and Singapore all fell, though most regained some ground in afternoon going. Australia was closed Monday for a national holiday. South Korea's market saw the region's biggest decline, down 2.7 percent to its lowest close since October 11. The country was hard hit by a computer virus that struck over the weekend. (Full story) Worries about a possible war in Iraq saw Japan's Nikkei 225 average lose 1.4 percent to 8,609.47, with the broader Topix closing down 1.32 percent to 850.03. Japanese exporters and tech stocks, including Sony, NEC, Toshiba, Fujitsu and Canon were all weaker, as the United States again pushed Iraq on weapons disposals. That raised fears of war in investors' minds, ahead of a report due to be delivered later Monday to the United Nations Security Council by U.N. weapons inspectors. Investors were also conscious of U.S. President George W. Bush's State of the Union speech on Tuesday. Wall Street sold off hard on Friday, marking a second week of declines as war fears hit there. The Dow Jones industrial average slumped 2.85 percent to end at 8,131.01, while Nasdaq plunged 3.32 percent to finish at 1,342.14. (Full story) Big caps decline in TokyoIn Tokyo on Monday, traders paid more attention to political risks in the Persian Gulf than the stream of earnings coming out of Wall Street.
A possible disruption of world trade over war drove stocks like NTT DoCoMo lower, with Tokyo's largest listing down 3.66 percent to 237,000 yen. Its parent, NTT, lost 4.97 percent to 421,000 yen on a report that communications companies connected with power companies will soon start to compete in Internet services. The company's former president, Hisashi Shinto, died of pneumonia over the weekend. (Full story) Higher oil prices stemming from tension over Iraq drove imports up in December, meaning a smaller-than-expected increase in Japan's trade surplus. (Full story) Yen eating into exportersLarge exporters also felt the effects of a stronger yen. Sony Corp. was down 1.8 percent to 4,910 yen, while Toyota Motor was off 0.34 percent to 2,975 yen. The yen was a little stronger over its level from Friday, at 117.83 to the U.S. dollar. Japan's finance minister, Masajuro Shiokawa, is urging the central Bank of Japan to ease monetary policy, which would weaken the currency. Banks also finished lower, with UFJ Holdings dipping 4.49 percent to 149,000 yen and Mitsubishi Tokyo Financial Group off 4.49 percent to 681,000 yen. Banks had gained last week after Mizuho Holdings announced a reorganization. Mizuho, the world's biggest bank by assets, was off 1.5 percent to 131,000 yen. Korea sees Asia's largest declineIn Seoul, chip and electronics maker Samsung Electronics, Seoul's largest listing, led the market lower with a 4.47 percent plunge to 299,000 won.
Steelmaker Posco gave up 1.99 percent to 123,000 won. Korean Internet users saw traffic slow to a crawl over the weekend as the country was hit by the SQL Slammer worm. Around a third of all trading in South Korea's stock market is done online. So the disruption hurt in terms of volume, as well as hitting stock in the country's largest Internet service providers, KT Corp. and Hanaro Telecom. (Full story) Wholesale decline for Hang SengIn Hong Kong, the Hang Seng finished down 1.71 percent at 9,298.78, with all but one of its 33 components moving lower. Market leader HSBC was off more than 1 percent to HK$83.50, the bank sinking on fears of disruption to the global economy. U.S. oriented stocks moved lower, with small-motor maker Johnson Electric off 3.37 percent to HK$8.65 and garment shipper Li & Fung down 3 percent to HK$7.50. Legend Group, parent of China's largest computer maker, was down 3.97 percent to HK$2.90 ahead of its earnings on Wednesday. Power company CLP Holdings was the lone gainer, up 0.96 percent to HK$31.70, as investors sought safe plays. Australian markets resume trade on Tuesday after Monday's Australia Day holiday. New Zealand's Top 40 closed down 0.3 percent to 1,995.19, with Telecom New Zealand off 0.65 percent to NZ$4.56. TSMC drives Taiwan lowerIn Taiwan, the Taiex was down 1.68 percent to 4,972.59, with techs bearing the brunt of Nasdaq's selloff.
Chip foundry TSMC, the largest stock listed in Taipei, lost just over 1 percent to T$48.90. Smaller rival UMC was down 1.85 percent to T$21.20. After early gains, China Airlines eased to close 0.6 percent lower at T$16.80. The airline completed the first commercial charter flight to China in 50 years, for the Lunar New Year holiday. Taiwan's market will close for a week as of January 29 to mark the start of the Year of the Goat. Techs lead Singapore sellingSingapore's Straits Times index ended down 1.97 percent at 1,331.25, banks and blue chips joining the early tech-inspired selling. Creative Technology finished down 2.33 percent to S$12.60, while Chartered Semiconductor dropped 4.00 percent to S$0.72 in the heaviest selling. But the market was broadly lower, bank stock UOB down 2.59 percent to S$11.30, SingTel off 2.21 percent to S$1.33 and Singapore Airlines giving up 1.5 percent to S$9.95. The Malaysian market was also lower, the Kuala Lumpur composite down 0.63 percent to close at 664.62.
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