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Asia smacked by Dow
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October 13, 1999: 3:11 a.m. ET
Tokyo tumbles nearly 2 percent, HK suffers more following sharp Wall Street declines
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LONDON (CNNfn) - Asian stocks fell sharply Wednesday as a firming yen and Tuesday's triple-digit nose-dive on Wall Street cast a pall over markets. Tokyo tumbled nearly 2 percent ahead of the Bank of Japan's policy meeting Wednesday, while Hong Kong gave up 2.3 percent amid persistent fears over new share placements and the government's upcoming sale of a unit trust.
Other markets also beat a hasty retreat as Tuesday's 2.17-percent plunge on the Dow Jones industrial average depressed sentiment across the region. The military's apparent ouster of the Prime Minister in Pakistan was not seen as having an immediate effect on regional trade.
Japan's benchmark Nikkei average shed 336.32 points, or 1.86 percent, to 17,754.49 as caution seeped into the market ahead of a key policy meeting at the country's central bank. Investors were also said to be rattled by a creeping climb of the yen, which was trading at around 105.95 against the dollar late Wednesday, slightly firmer than its late Tuesday level of 106.28 in Tokyo and 106.31 in New York.
The fear is that a further erosion in the value of the dollar against the yen will make exports more expensive, hurting export-reliant Japanese manufacturers.
Hong Kong's Hang Seng suffered an even sharper setback than Tokyo, shedding 2.26 percent, or 288.63 points to 12,470.72 in afternoon trade as worries mounted about the government's pending launch of a large unit trust. The government is yet to specify the value of the public offering, part of a larger portfolio amassed during a market intervention at the peak of the territory's financial crisis last year.
Overnight weakness on Wall Street also dragged on sentiment. The Dow Jones slid 231.12 points, the second-biggest point loss this year. The tech-heavy Nasdaq fell 1.5 percent, while the S&P 500 gauge tumbled 1.7 percent.
New-share placements also hit sentiment in Hong Kong. Pacific Century CyberWorks said Wednesday it had raised nearly HK$4 billion from a share placement and another big firm, CNOOC Ltd, is poised to pounce with its own HK$2 billion placement.
In Singapore, the Straits Times Index was down 1.6 percent at 2,084.76, rattled by the Wall Street decline. Banking and electronics stocks were especially hard hit, with the big Nasdaq loss and weaker-than-expected third-quarter earnings by Intel eating into the tech sector.
Australia's All Ordinaries slipped nearly 1 percent, to 2,906.7, with gold stocks offering a rare bright patch. Jakarta was off almost one and a half percent as political concerns intensified after the former ruling Golkar party confirmed its endorsement of President B.J. Habibie in the presidential ballot set for Oct. 20.
South Korea shares closed only a touch lower after initially buckling under the wave of Wall Street selling. Late overseas buying helped drive a recovery in the Kospi, which closed down only 0.09 percent, at 855.52.
Philippine shares also succumbed to the bearish regional mood, giving up 0.76 percent by the close, while Thai stocks retreated 2.2 percent. Taiwan managed to close barely in the black - up 0.02 percent at 7,836.94 - despite a resumption in the rationing of power following the recent earthquake.
In Tokyo, high-tech issues were weaker on the back of Nasdaq's decline. NEC Corp. slid 3.16 percent to 2,300 yen, while Fujitsu Corp. gave up 5.62 percent to 3,360 yen. Meanwhile, international telecom carrier KDD Corp., which had risen on expectations of a merger with two domestic rivals, ended down 4.11 percent at 14,000 yen.
In Hong Kong, Hang Seng Bank rose HK$2.25 to HK$85.50 after announcing Tuesday plans to pay a special interim dividend totaling HK$7.84 billion to shareholders on Nov. 5. Cathay Pacific airlines, however, eased HK$0.95 to HK$14.75 following its earlier announcement that it had placed an order for two new Boeing aircraft to enhance service on its main Asian routes.
--from staff and wire reports
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