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Fourth day of losses in Tokyo
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October 28, 1998: 5:15 a.m. ET
Nikkei slides 2.2 percent; Singapore jumps
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LONDON (CNNfn) - Japan's gloomy economic outlook and concerns about earnings sent Tokyo spinning 2.2 percent lower Wednesday. It was the Nikkei's fourth straight day of losses.
With Hong Kong closed for a holiday, it was left to the region's other main market, Singapore, to impress. The Straits Times Index ended up 2.31 percent.
Australia, the Philippines, South Korea and Thailand all also closed higher, emulating Europe where bourses posted good gains Tuesday.
But stuck in reverse with Japan were Indonesia, Malaysia and Taiwan which instead chose to follow Wall Street lower.
Japan's Nikkei 225 average ended down 304.61 points at 13,516.07. Overseas investors appeared to be selling but analysts struggled to come up with reasons for the decline. Concerns about Sony's earnings weighed on the market.
"There is a lack of confidence but there were not any fundamental developments at all," said Lehman Brothers chief economist Russell Jones.
"The production numbers were in line with expectations, the retail sales numbers were in line with expectations, the Bank of Japan didn't do anything to monetary policy, again in line with expectations," he said. "But there is uncertainty about the real economy and there is no prospect of relief. Last week's rally was a bit of a spoof."
Sony announced its group net profit in the first half of 1998/99 dipped by 5.4 percent from last year, to 86.05 billion yen ($729 million).
The announcement came after the market closed. But with its music division already announcing disappointing half-year earnings Tuesday, the market knew the way the wind was blowing at the electronics and entertainment giant. Sony's shares fell 530 yen to 8,010.
Mitsubishi Oil and Nippon Oil both fell despite announcing they will merge, a move they say will cut costs by 70 billion yen ($587 million) over the next five years. Mitsubishi lost four yen to199, while Nippon fell five yen to 402.
Expectations of interest rate cuts and overseas buy orders boosted Singapore.
"There was no fundamental news," said one local analyst. "It's just the rounds of interest rate cuts."
The Straits Times Index rose for the third day in a row, adding 26.62 points to 1,180.22.
Taiwan lost a little more than 1 percent on the day as it continued to head south. But the Philippines enjoyed its fifth straight day of gains, though its advance was a modest 0.61 percent.
After plunging more than three percent Tuesday, South Korea bounced back with a one percent advance.
Australian stocks edged up on better than expected inflation news. With expectation of an interest rate cut rising on the numbers, the All Ordinaries index closed up 32.3 at 2615.2.
Market heavyweight News Corp. (NWS) put on 31 cents to A$10.58.
Malaysian traders paid little heed to predictions by the International Monetary Fund that the economy would begin to recover next year. The KLSE ended trade down 1.32 percent.
Despite Indonesia's central bank talking up the economy and predicting interest rates would fall below 50 percent by the year end, the Jakarta Composite index shed 5.811 points to 312.390.
Surging 3.51 percent, Thailand put on the day's best performance, a rise of 11.22 points to 330.45.
Earlier Thai Finance Minister Tarrin Nimmanahaeminda said low interest rates were now a permanent feature of the economy.
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