|
Worries nibble at Nikkei
|
 |
May 14, 1999: 5:22 a.m. ET
Tokyo dips on earnings jitters, HK slips despite Dow record
|
LONDON (CNNfn) - Asia's largest stock markets ended lower Friday as Wall Street's overnight surge to a fresh high failed to allay corporate earnings anxiety in Japan and worries over the planned sale of a number of blue chips by the government in Hong Kong.
The Nikkei 225 ended 0.24 percent, or 40.86 points lower, at 16,810.39 as many investors refrained from any major market moves ahead of a stream of earnings announcements next week.
Concerns about a weaker yen and skepticism about whether the nation is really on track for an economic rebound also dogged Tokyo traders. The Nikkei was down 0.8 percent for the week. But the average remains up 21.4 percent for the year to date.
Markets shrugged off a report by Japan's Economic Planning Agency suggesting that the economic decline is tapering, Reuters reported.
"We just do not see this economic recovery," Robert Sasaki, a Tokyo-based strategist with Jardine Fleming told CNNfn.com. "Last month was yet another record unemployment level, and land prices continue to fall - and land is the collateral that banks use."
Sasaki said investors may have been spooked in the last week by a mixed bag of earnings that included better-than-expected results by Honda, but a worse report from Fuji. Overseas investors, he noted, account for 34 percent of Fuji's capital and 18 percent of Honda's.
Russell Jones, the chief economist at Lehman Bros. in Tokyo, said the Nikkei appeared vulnerable at the moment. Despite recent hopes for economic recovery, Jones said, "there is no sense that this government is really ready to attack the vested interests."
Asia's two largest markets failed to take their lead from a 106.82-point run-up in the Dow Jones Industrial average, to a fresh peak of 11,107.19. The Dow rise drew momentum from a strong advance in IBM (IBM) after the computer colossus said it foresaw robust growth in the near future.
In the corporate sector, Nissan Motor Co. announced plans Friday to shut down a production line in Japan by 2003. The closure is aimed at cutting production to 1.7 million units by 2003, from a current level of 2 million. Separately, the company unveiled plans to sell its vehicle transmission development business to a subsidiary, Reuters reported.
Nissan shares jumped 3.7 percent to 530 yen Friday.
Hang Seng falls
Shares on Hong Kong's benchmark Hang Seng were also infected by the cautious mood. The leading index extended earlier losses to finish down 198.15 points, or 1.52 percent, at 12,855.52. Among index heavyweights, HSBC Holdings slipped more than 1 percent to close at HK$266, while Hongkong Telecom eased 2 percent to HK$19.30.
The Hang Seng was down 1.1 percent for the week but remained up 28 percent year-to-date.
Lingering questions about China's bid for entry into the World Trade Organization following NATO's mistaken bombing last Friday of the Chinese embassy in Belgrade also weighed on morale.
Traders attributed much of the Hang Seng's weakness Friday to fears that the Hong Kong government is moving to wrap up a disposal of blue chips accumulated during a market intervention last summer. The government named three investment banks last month to serve as advisers in the disposal.
"It is going to haunt the market from time to time," Gilbert Chu, the head of Research at Sun Hung Kai Research, told Reuters.
But stocks elsewhere in the region bucked the trend on the major indexes.
Singapore's Straits Times index ended nearly 0.8 percent higher, buoyed by a strong showing in the electronics sector and among bank and property stocks, which benefited from forecasts of benign interest rates.
Kuala Lumpur shot up 4.5 percent ahead of a road show next week for the government's $2 billion sovereign bond issue. Local traders said an influx of overseas funds and retail investment also prodded Malaysia higher.
The weighted index in Taiwan raced 2.4 percent higher, to close at 7,592.53, though Philippine shares eased just under 0.8 percent on a technically-driven correction. Australia's All Ordinaries index rose 1 percent to end at 3,060.1.
Stocks in Jakarta advanced 2.6 percent as investors welcomed the peaceful civil climate and made light of the ruling party's nomination of President B.J. Habibie in elections set for later this year.
Consolidation pressures, flagged by a sell-off in bank stocks, drove Thai shares about 0.6 percent lower in late trade, a loss matched in percentage terms by South Korea's Kospi, which built on Thursday's 4 percent slump. Interest rate worries plagued Seoul investors throughout the session.
-- from staff and wire reports
|
|
|
|
|
 |
|
