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Tokyo, Hong Kong plunge
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December 11, 1998: 5:57 a.m. ET
Nikkei and Hang Seng dive 3 percent as Singapore sheds 2 percent
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LONDON (CNNfn) - Hong Kong led the major Asian markets into the red Friday, as a sharply lower close on Wall Street and local bad news also sent Japan and Singapore into a tailspin.
Hong Kong plunged 3.5 percent, taking the index back through the crucial 10,000 point barrier. Japan dived 2.7 percent, while Singapore closed off 2 percent.
With Wall Street shedding almost 2 percent and European bourses drifting down Thursday, Asia found the going tough from the start.
Australia finished 1.2 percent lower while Taiwan closed 1.5 percent down. Korea ended 2.2 percent off.
But there were some bright spots. Malaysia rallied to end 1.6 percent higher while the Philippines added 0.7 percent on the day. Thailand and Indonesia inched ahead by the time they closed.
Hong Kong took a drubbing, dragged down by the fall on Wall Street and traders' reluctance to take big positions ahead of Christmas.
The Hang Seng index closed 363.44 points off at 9,952. After a roller-coaster five days the index was little changed on the week.
Blue chips across the board were hit and while China-related stocks held up a little better, they too closed in the red.
"It was very much Wall Street that did it," said South China Brokerage vice-chairman Howard Gorges. "There weren't any local factors at work.
"When it dropped below 10,000 people got a bearish. Now it is below 10,000 I think quite a lot of institutions could do a bit of buying but it depends what Wall Street does."
Index heavyweight HSBC Holdings lost HK$8 to HK$189 despite the U.K. base rate cut. HSBC owns British retail bank Midland but traders said the stock had already discounted the cut.
Property developers were also hurt with Cheung Kong losing HK$2.5 to HK$53.75.
Hong Kong Telecom was hit, losing 45 cents to 13.6. Local analysts played down the impact of the announcement that highly-regarded chairman Dick Brown is leaving, instead blaming the general market slide.
The market mood in Japan was thick with bad news, sending the benchmark Nikkei average down 402.16 points to close at 14,405.64. It was more than 200 points down on the week, almost 2 percent.
The specter of Wall Street hung heavily over the market but local problems made a bad situation worse.
The special quotation settlement for December futures and options contracts meant the market opened weakly, while warnings from the Bank of Japan that the economy would fail to recover next year depressed traders further.
"People tend to believe the Bank of Japan governor rather than ministers," said HSBC strategist Garry Evans.
Traders were also selling ahead of publication of key business sentiment figures due Monday, said Evans. "Everyone is expecting it to be quite negative," he added.
It emerged that the government's much touted tax cuts would only benefit top earners, with 80 percent of salarymen actually worse off after the cuts.
As if this were not bad enough, exporters were also hurt by the yen, which strengthened to 117 against the dollar. Oil, real estate and auto stocks were all down more than 3 percent, with banks 1.65 percent lower.
Sumitomo Bank dived 3.39 percent to 1,338 yen while Honda plunged 4.12 percent to 4,190 yen.
Wall Street took its toll on Singapore, too. The Straits Times index closed down 28.61 points at 1,411.27, though it was 4 percent higher for the week.
Multi-media group Creative Technology lost S$1.2 to S$26.5 while heavyweight Singapore Press Holdings lost 20 cents S$17.8. Banks and property-related stocks were mixed.
Australia closed 1.2 percent lower while Korea lost 2.2 percent. Nevertheless, Seoul stocks were almost 20 percent up on the week. Taiwan closed off 1.54 percent.
The Philippines ended up 0.73 percent while Malaysia advanced 1.58 percent. Thailand and Indonesia moved out of the red and into the black in the afternoon though both finished less than 0.5 percent higher. 
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