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Nikkei slips on economic woes
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April 21, 1999: 5:54 a.m. ET
Tokyo hit by downbeat IMF report, Korea suffers union worries, HK bounces
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LONDON (CNNfn) - A bleak assessment of Japan's economy sent blue chips spiraling lower in Tokyo. Only Hong Kong and Singapore made any headway Wednesday, with other Asian markets in the red.
The Nikkei 225 index fell 202 points to 16,495.02, a drop of 1.21 percent, after the International Monetary Fund report said Japan's recession was worse than previously suspected. The study predicted the economy would shrink 1.4 percent this year, instead of the 0.5 percent reduction forecast last December.
This downbeat assessment depressed investors and caused a sell-off among cyclicals and stocks linked to the domestic economy, which have done well in recent sessions. Paper, steel and auto shares all suffered.
Among the biggest decliners were steel maker NKK Corp., which shed over 4 percent to close at 95 yen, while Nippon Steel Corp. fell 3.8 percent to end at 278.
Toyota Motor lost almost 5 percent to 3,520 yen, while Honda Motor fell 5.2 percent to 5,130.
Tech stocks were mixed, despite the rally on Nasdaq. Sony Corp. lost 20 yen to 11,280, while Fujitsu added 6 yen to 1,920.
In Hong Kong, the Hang Seng closed just over 1 percent higher, up 134 points at 12,543.76 after Tuesday's losses.
Stocks took their cue from Wall Street and the announcement by one index heavyweight that it would not seek to tap the market for more capital. "Wall Street was steadier overnight and Hutchison has denied a share placement rumor, so the market rebounds," Alan Pau, associate director of South China Securities told Reuters.
Conglomerate Hutchison gained 2.3 percent to close at HK$67.75. Property developer Wharf Holdings surged almost 7.5 percent to HK$17.30, regaining almost half its losses from Tuesday.
In Sydney, the All Ordinaries index closed 21 points lower at 3,068.3 after the influential resources sector lost ground toward the end of the session, following recent strong gains.
Singapore blue chips were led higher by the Nasdaq's performance Tuesday but pared some gains toward the end. The Straits Times index closed up 1.82 percent at 1,842.33, a jump of 33 points.
Elsewhere, other regional markets were generally lower. The prospect of more militant union action in Korea, sent the Kospi plunging over 3.5 percent to 743.26, after a phenomenal run in recent sessions.
Taiwan's blue chips lost just over 2 percent to close at 7,474.16, while Philippine's leading index shed just under 2 percent to close at 2,312.97.
Thailand's Set index was down just 7 points at 399.11. In Kuala Lumpur, the Composite closed in the red, down 5 points at 616.70 and Jakarta's blue chips finished 5 points lower at 480.63.
-- from staff and wire reports
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