|
Big Asian markets in the red
|
 |
November 6, 1998: 5:23 a.m. ET
Region gloomy despite rate cuts in Europe and gains on Wall Street
|
LONDON (CNNfn) - Japan, Hong Kong and Singapore all plunged into the red Friday, as Asian markets succumbed to selling pressure by cautious investors cashing in recent gains.
With the major regional markets all finishing down, there was scant consolation in the handful of positive closes among other exchanges.
Australia, Malaysia the Philippines and Thailand closed up, but Indonesia, Korea and Taiwan were also down on the day.
Just as interest rate cuts were not enough to avert a slide in Europe Thursday, Wall Street's afternoon surge - taking it to its highest level in three months - failed to inspire follow-on buying in Asia.
Japan's benchmark Nikkei index closed down 1.53 percent, shedding 219.40 points to close at 14,121.97. December futures were down 70 at 14,190.
The market reacted badly to further signs from the government that its economic reform package might be weaker than had initially been hoped.
The ruling Liberal Democratic Party lacks a majority in parliament's Upper House and has been forced to make compromises over tax changes to force through reform. It will announce new economic forecasts later this month.
Earlier Friday, in its monthly report, the Economic Planning Agency (EPA) warned: "The economy is in a prolonged slump, with conditions extremely severe".
West LB Securities treasury economist Richard Hostetter said: "Negative sentiment and bad economic news continue to fall out of Japan at a very rapid pace.
"I think the view is beginning to emerge that at the end of the day slightly better than expected growth in the U.S. and slightly better than expected growth in equity markets globally are not going to end Japan's woes. It is more of a return to reality. Real selling pressure is going to remain high".
Moves by Mitsubishi Motors, Japan's leading auto maker, to cut production, investment and debt did not impress the markets. It was down five yen to 250.
The company will make a loss of 18.30 billion yen ($155 million) on a parent current basis in the half-year to September 30.
A Japanese paper reported the company planned to lay off about 1,000 workers in the U.S. and close down two domestic plants.
Fuji Bank Ltd. and Dai-Ichi Kangyo Bank Friday confirmed plans to launch a trust business strategic alliance in 1999. They were both down more than two percent.
Sanwa Bank fell 21 yen to 991 after saying it would more than halve its number of overseas branches and reduce domestic branches by 20 percent.
Nippon Steel Corp. eased two yen to 215 after lowering its forecast for Japan's overall crude steel production.
Hong Kong dipped again, though traders said falls were cushioned by prospects of an interest rate cut in the U.S. after the U.K. cut rates Thursday.
The Hang Seng index closed at 10,139.75, 82.23 points down.
Blue chips were mixed with HSBC Holdings easing HK$0.50 to HK$186.00 and Hongkong Electric up HK$0.10 at HK$26.70.
Hongkong Telecom reported broadly level half-year sales and profits. Net profit was up a little to HK$6.096 billion from HK$6.014 billion and revenues dipped slightly to HK$17.15 billion from HK$17.68 billion. The stock added five cents to HK$15.50 on the news.
"Red chips are down around five percent on average", said one trader. "Basically the market was running out of steam having had six companies and HK$3 billion come to market in a week. That soaked up a lot of liquidity".
The failure of local CD and video chain KPS, caused "jitters" in the market, he added.
After falling away a little in late trade, Singapore closed 1.21 percent lower. But Australia piggy-backed on Wall Street's gains, rising 0.93 percent.
The benchmark All Ordinaries index finished 24.9 points, or almost one percent higher, at 2,697.3. The cut in U.K. interest rates took banks higher. National Australia Bank jumped 34 cents to A$22.19
The Philippines closed up 2.03 percent after receiving approval from the International Monetary Fund to boost spending in 1998 and 1999 and give its slowing economy a lift.
Taiwan eased 0.97 percent despite some reasonable corporate news. Acer Inc., the country's largest computer maker, reported October sales Friday of T$10.3 billion ($317 million), a monthly record that it said eclipsed all other Taiwan manufacturers.
South Korea dipped 0.45 percent after the government said it may reintroduce higher taxes. The performance of financial markets will determine the timing of implementation, the finance ministry said.
In Indonesia the rupiah strengthened after Thursday's steep falls, though equities were little moved, up just 0.44 percent.
Thailand closed an encouraging 4.01 percent higher, outshining Malaysia which enjoyed a better week. It was up 3.34 percent on the day.
|
|
|
|
|
 |
|
