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Tokyo lower, HK edges up
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February 10, 2000: 6:38 a.m. ET
Nikkei ends down 1.5% ahead of long weekend; HK boosted by Cheung Kong
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LONDON (CNNfn) - Tokyo stocks ended lower Thursday ahead of a three-day weekend but continued optimism over a series of new investment trusts helped the market avoid the big losses that hit Wall Street Wednesday. Stocks in Hong Kong edged higher.
The benchmark Nikkei Average of 225 leading stocks fell 297.75 points, or 1.5 percent, to 19,710.02 as investors squared positions ahead of a three-day weekend. The retreat came a day after the Nikkei finished above 20,000 for the first time since July 1997. Volume Thursday was a relatively active 845.2 million shares, up from Wednesday's 720.5 million.
Much of the recent buying in Tokyo has been spurred by expectations that a series of new investment trusts will help pump funds into Asia's largest stock market. The largest of the trusts to be launched so far - Nomura Asset Management Fund's "Project Big-N" - took in more than 792 billion yen ($7.3 billion) in funds to be invested.
Technology stocks fared poorly in Tokyo following overnight losses in New York. The Nasdaq composite index fell 1.5 percent to 4,363.24 after a seven-session winning streak that included three record closes, including Tuesday's 4,427.50. The blue-chip Dow Jones industrial average slid 2.4 percent to 10,699.16, while the broader S&P 500 gave up 2 percent to 1,411.71, pressured by concerns over interest rates.
In Tokyo, Sony Corp. slid 2.9 percent to 28,710 yen, Hitachi sank 1.5 percent to 1,601 yen and Fujitsu lost 1.6 percent to 3,730 yen. Securities houses, which have rallied amid high hopes for the new investment trusts, were mixed Thursday, with Nomura Securities jumping 4 percent, Daiwa Securities slipping 1.7 percent and Nikko Securities losing about 1 percent.
Companies that deal in Internet-related security gained after a spate of hacking attacks against some of the largest U.S. web sites. Trend Micro, a maker of anti-virus software, soared 7.8 percent, rising by its daily limit of 2,000 yen to 27,800 yen. Rival Vertex Link Corp. closed up 12.5 percent and firewall software maker Nissin Electric leapt 21.6 percent.
The dollar was quoted at 108.67 yen, little changed from late Wednesday in New York.
In Hong Kong, the Hang Sang Index rose 25.71 to 16,845.17, wiping out early losses. Interest-rate sensitive bank and property stocks took a hit, though losses in those sectors were offset by gains in Hutchison Whampoa and its parent, Cheung Kong Holdings -- both seen as possibly benefiting from the recent merger pact in Europe between mobile phone companies Vodafone and Mannesmann.
Hutchison Whampoa, which confirmed Wednesday it planned to sell its 10.1 percent stake in Mannesmann to Vodafone AirTouch, closed up 2.3 percent at HK$131.00, virtually matched in percentage terms by Cheung Kong Holdings, which finished at HK$112.00.
"Investors are quite bullish on Hutchison and Cheung Kong and the role they will have in the Vodafone and Mannesmann deal," George Chan, a senior analyst at Kwai Hung Securities, told Reuters.
Tugging in the other direction, index heavyweight China Telecom slipped after soaring earlier in the week, dipping 0.4 percent to HK$64.00. Banking giant HSBC Holdings gave up HK$0.75 to HK$90, while Dao Heng Bank Group shed 4 percent to HK$33.40 and Sun Hung Kai Properties gave up 2.7 percent to HK$73.00.
Interest rates were also in the back of investors' minds Thursday ahead of a rate-review meeting of the Hong Kong Association of Banks Friday. The association is expected to hike the deposit rate by a quarter percentage point to 4 percent, taking a cue from the U.S. Federal Reserve's recent quarter-point increase in short-term rates.
A sharp rally in Rupert Murdoch's News Corp. pushed the All Ordinaries in Sydney up 38.5 points, or 1.2 percent, to a record 3,172.5.
News Corp. jumped 8.7 percent to A$23.70, after Wednesday reporting second-quarter earnings in line with forecasts. But the recent was driven by optimism the company is well positioned to tap into the new wave of media mergers, flagged by Time Warner's watershed tie-up with America Online, investors and analysts said.
In Seoul, the benchmark Kospi index lost 1 percent to 966.18 on futures-linked losses for Korea Telecom, Pohang Iron and Steel and other blue chips. The world's biggest steel maker in production terms, Pohang fell 4.3 percent to 123,000 won. Analysts told Reuters the central bank of Korea's raising of its target on its key short-term interest rate had prompted investment trusts and banks to sell futures-linked stocks.
The Straits Times Index in Singapore closed down 2.02 points at 2,225.30.
The weighted index in Taiwan rose 0.5 percent to end at 10,057.67 amid brisk overseas fund buying. The Kuala Lumpur stock exchange added 0.6 percent to 997.59, bringing its winning streak to five straight sessions. The index is up 22.8 percent for the year.
Manila shares fell about 1 percent while Thai stocks slipped 0.6 percent. 
--from staff and wire reports
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