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Asia hit by US share sell-off
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May 10, 2000: 6:12 a.m. ET
Markets hit by telecom, tech declines as overseas investors pull back
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LONDON (CNNfn) - Asia's major equity markets fell for a fourth straight session Wednesday, with telecom and technology stocks losing ground to send the blue-chip indexes in Tokyo and Hong Kong to six-month lows.
An outflow of overseas funds in the first two months of the year, notably to the Nasdaq composite, has been compounded as U.S. shareholders liquidate more of their overseas holdings, traders said. The latest withdrawals could be by investors who have seen declines in the value of shares they bought with borrowed money, requiring them to pay more into brokerage accounts to meet so-called margin calls.
Tokyo's benchmark Nikkei 225 closed down 143 points, or 0.8 percent, at 17,701.47, rallying in afternoon trade from an eight-month low of 17,393 reached earlier in the session. A report showed that non-Japanese buyers withdrew a net ¥846 billion ($7.8 billion) from equities in March, the largest monthly total in 10 years.
In Hong Kong, the Hang Seng ended down 284 points, or 1.9 percent, at 14,492.92, though it moved up from a six-month low of 14,380. Telecom shares were the weakest components, mirroring the previous day's losses among their European peers.
The Kospi benchmark in Seoul remained among the firmest in the region, though it closed down 0.2 percent at 759.51, also depressed by losses in telecom shares, though chipmakers made narrow gains.
Singapore's Straits Times fell heavily again, with tech shares dragging the index down 1.54 percent to close at 2,057.22.
Among smaller markets, the Set 50 in Bangkok was worst hit, shedding 3.6 percent to reach an 18-month low as a weakening Thai baht sent overseas investors scurrying for the exits. The index has lost almost 10 percent this week.
Asia's weak performance followed another woeful session for technology stocks in the U.S. Tuesday, with the Nasdaq composite closing down 2.3 percent. The blue chip Dow Jones industrial average posted a narrower 0.6 percent decline.
In Tokyo Wednesday, mixed economic data failed to temper selling. Although a report showed a 4.3 percent fall in retail sales in the year to Mar. 31, a broader gauge of all economic indicators for March climbed to 86 - a reading above 50 indicates that the economy is expanding.
Telecom, electronics shares fall
Consumer-electronics manufacturers Toshiba, Canon and Hitachi all fell about 1 percent, but heavyweight telecom shares proved the greatest drag. NTT DoCoMo lost 4 percent, the day after it announced a $4.5 billion investment in the mobile-phone arm of Dutch telecom market leader Royal KPN.
Matsushita Communications, a maker of telecom equipment, fell 5.1 percent, and other tech plays lost ground, with chipmaker Advantest dropping 2.5 percent and sector rival NEC off 1.6 percent.
Industrial stocks limited the Nikkei's decline. Nippon Steel was the most heavily traded stock on the index, rising 2.1 percent, while Kawasaki Heavy Industries soared 11 percent.
In Hong Kong, China Telecom pulled the market down with a 3.5 percent decline, while Hutchison Whampoa lost 1.7 percent on concern about the rising cost of its investments in third-generation mobile-phone services in Europe. Expectations of higher interest rates continued to weigh on banking and property shares, with HSBC Holdings down 0.8 percent and Wharf Holdings off almost 4 percent.
Singapore retreated under the weight of across-the-board declines in banking and technology shares, with United Overseas Bank off 3 percent after analysts at CSFB cut their recommendation on the stock to "sell" from "hold".
Sydney's new S&P/ASX200 index ended 1.4 percent lower at 3,043.40, with telecom shares again the culprits. Taiwan's TAIEX index closed 0.9 percent lower at 8,559.87, its tech stocks declining with the Nasdaq's slide.
Manila's PHS Composite ended fractionally lower at 1,522.96.
Kuala Lumpur's KLSE Composite bucked the regional trend with a 0.5 percent advance to close at 932.47, and the JSX index in Jakarta added 0.1 percent to end at 548.24. 
-- from staff and wire reports
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