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Earnings concerns hurt Nikkei
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May 11, 1999: 5:46 a.m. ET
Earnings jitters drag on Nikkei; HK slips as U.S.-China worries persist
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LONDON (CNNfn) - Asia's two largest equity markets ended in the red Tuesday. A grab-bag of factors, from Wall Street weakness and corporate earnings jitters to nagging worries over the consequences of NATO's bombing of the Chinese embassy in Belgrade damaged morale.
Japanese shares slipped 1.4 percent as investors exercised caution ahead of uncertain corporate earnings reports. Hong Kong stocks narrowed losses toward the close, but still ended 2.2 percent lower as investors scanned the fine print of HSBC's $10.3 billion bid for Republic New York Corp.
The Nikkei 225 average tumbled 1.38 percent, or 233.83 points, to 16,743.18 as investors proved reluctant to push the benchmark index beyond the 17,000 resistance level until they've had a chance to assess forthcoming financial results.
"Investors want to see how earnings forecasts look before moving," Yukio Takahashi, a manager in the investment information division at Wako Securities told Reuters.
Tokyo's fall came after the Dow Jones Industrial average dipped 24 points overnight to end at 11,007.25. A better performance from U.S. technology stocks on the Nasdaq went largely unheeded in Tokyo, where high-tech heavyweights took a beating.
Hitachi slipped 4.34 percent, to 904 yen, Toshiba shed 2.5 percent to 777 yen, while NEC Corp. gave up 2.7 percent to 1,362 yen.
On the upside, Nissan Motor Co. soared nearly 5 percent, to a new year-high of 511 yen, after announcing plans to share auto production with France's Renault (PRNO) in emerging markets. Banking stocks suffered a setback, however, in the wake of recent gains.
Souring U.S.-China ties?
In Hong Kong, the Hang Seng index finished down 288.83 points, or 2.2 percent, at 12,874.37.
Investors began to fret that NATO's accidental bombing of the Chinese embassy in Belgrade could deal a setback to China's entry into the World Trade Organization. Separately, Clinton administration officials told The Wall Street Journal, it is unlikely Deputy U.S. Trade Representative Robert Cassidy will travel to Beijing next week to reconvene talks on China's WTO bid.
After an initial rise, HSBC Holdings ended unchanged at HK$270 as investor enthusiasm for the bank's takeover plans showed signs of tapering. HSBC shares were suspended Monday pending confirmation of the deal.
Singapore's Straits Times index bucked the downtrend. The index closed up more than 1 percent, at 1,888. Property stocks slipped from intra-session highs amid jitters over rising short-term rates.
Jakarta shares slipped about 0.5 percent, despite expectations of a stronger rupiah and hopes of lower interest rates.
Sharp gains in blue-chip issues such as Telekom and Tenaga underpinned a robust rally on Kuala Lumpur's stock exchange, which finished 1.8 percent higher.
But Seoul's Kospi fell more than 4 percent as investors took a breather from a recent sharp run-up in blue chips. Many investors perceive big-cap stocks as overvalued, analysts told Reuters. South Korea's Daewoo said Tuesday it had reached a preliminary agreement to make a $1 billion investment in GTM, a French civil engineering firm.
Australia's All Ordinaries staged a rebound to close just 0.35 percent lower, at 2,986.2 as Rupert Murdoch's News Corp. curried favor with investors.
Philippine shares lost 1 percent to close at 2,537.58, while Taiwan's weighted index eased fractionally to finish at 7,474.45.
Thai shares pared early gains, but remained up 0.8 percent in late trade amid signs that overseas investment may be flowing back into the country.
--from staff and wire reports
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