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Asia weak, eyes US GDP
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April 27, 2000: 6:06 a.m. ET
Indexes drift as economic reports seen prodding Fed to raise rates
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LONDON (CNNfn) - Asian markets mostly suffered modest declines Thursday amid concern that U.S. economic reports due later in the day would provide further evidence of inflation that could lead to higher interest rates.
Tokyo's benchmark Nikkei 225 average fell 30.57 points, or 0.2 percent, to close at 18,103.74, as investors factored in potentially market-damaging news on the U.S. economy. Traders were also awaiting annual earnings from high-tech companies on Friday. Hong Kong's Hang Seng ended the session lower, slipping 0.2 percent to 15,192.87.
Economists expect Thursday's report on U.S. gross domestic product to show that the economy grew at a sparkling 5.6 percent annual rate in the first quarter of 2000. The employment cost index, a gauge said to be closely watched by Fed Chairman Alan Greenspan, is also expected to have risen.
The U.S. Federal Reserve has tightened credit five times since last June, bringing its main lending rate to 6 percent. Analysts expect another quarter-point increase May 16, with the possibility of more rate hikes to come.
U.S. stocks fell Wednesday as interest-rate concerns depressed investors. The Dow Jones industrial average fell 179.32, or 1.6 percent, to 10,945.50. The Nasdaq composite index shed 81.14, or more than 2 percent, to 3,630.09, and the S&P 500 fell 16.15, or 1 percent, to 1,460.99.
In the currency markets, the yen was little changed against the dollar at ¥106.22 from ¥106.29 in late New York trading Wednesday.
Among Japanese high-tech companies Thursday, Sony Corp. fell 2.1 percent, Fujitsu dropped 4.5 percent, and Toshiba Corp. rose 3.9 percent. All three feature among the companies set to report annual earnings Friday.
Analysts polled by Reuters on average expect Sony to post a consolidated operating profit Friday of about 245 billion yen for the year ended March 31, down about 30 percent from the year before.
Troubled department store operator Sogo Co. fell 13.2 percent. The company Wednesday said its annual loss widened to ¥137.6 billion.
Audio equipment maker Pioneer Corp. rose 7 percent after it raised its group net profit estimate to ¥10 billion from the previous forecast of ¥5 billion for the business year ended in March.
Shares in internet investor Softbank Corp rose 8.7 percent, extending the stock's recent recovery from a two-month decline.
In Hong Kong, conglomerate Hutchison Whampoa rose 3.8 percent to HK$109.50, while China Telecom fell 3.6 percent to HK$52.25. Other losers included Dao Heng Bank, which dropped 5 percent and Swire Pacific, which tumbled 5.6 percent.
Pacific Century CyberWorks rose 1.5 percent after Chairman Richard Li said his offer to merge with Cable & Wireless HKT would proceed, despite reports of a rival offer from Rupert Murdoch's News Corp.
In Singapore, the Straits Times index rose 2 percent to close at 2,151.72, with technology stocks leading the charge. Electronic contractor Venture Manufacturing rose 12 percent on speculation of an imminent announcement of a partnership with a U.S. company, which analysts said could be Cisco Systems (CIS: Research, Estimates). Newspaper monopoly Singapore Press Holdings gained 3.6 percent.
Taiwan's benchmark TAIEX index closed little changed, drifting down 5.99 points, or 0.07 percent, to 8,535.96, amid fears of worsening tensions with mainland China. The Taiwan Ministry of Defense warned Tuesday that China had intensified training for bomber crews and increased naval activity in the East China Sea.
Traders said they saw clear indications that the state intervened to buy heavily weighted electronic and financial stocks. Taiwan Semiconductor Manufacturing gained T$3 to T$188, and United Microelectronics rose T$3.5 to T$97, while China Development Industrial Bank climbed T$0.3 to T$45.3.
In Australia, the All Ordinaries fell 11 points, or 0.3 percent, to 3,104.5. Economists expect a 0.25 percent increase in local interest rates at next week's monthly Reserve Bank of Australia board meeting, and are also concerned about the prospect of rising U.S. rates.
Index heavyweight News Corp. rose 1.7 percent, in line with Wednesday's rise in its American Depository Receipts in New York trading. The Wall Street Journal reported Rupert Murdoch had teamed up with Singapore Telecommunications to bid against Pacific Century CyberWorks for Cable & Wireless HKT.
Malaysian shares rose 0.1 percent, Thai stocks fell 0.5 percent, and Korea's Kospi index was down 21.16 points, or about 3 percent, at 713.23. Investors were worried about the rumors of losses at Hyundai Group and the potential impact on its affiliates.
Manila's benchmark index fell 1.2 percent to 1,620.53, falling for a fourth consecutive session, weighed down by a hike in local interest rates, outbreaks of disorder in the southern Philippines and the closure of Urban Bank. Philippine troops continued their offensive against the Muslim separatist group Abu Sayyaf, which has claimed responsibility for kidnapping 21 tourists. Investors were also worried by news that the Philippine central bank placed Urban Bank in receivership on Wednesday after heavy withdrawals. 
-- from staff and wire reports
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