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Tokyo declines again
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August 26, 1999: 6:39 a.m. ET
Nikkei drops for third straight session as most Asian markets ignore Dow record
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LONDON (CNNfn) - Tokyo was hit by a technical sell-off and worries over the yen's strength as most of Asia's markets ignored another record for the Dow.
The Nikkei 225 closed more than 1 percent lower in thin trading at 17,666.29, a fall of 189 points. Investors held back from buying on the final day for settlement of positions taken up during August.
"Market players are not so inclined to start fresh buying today. Other than that, there are no major factors to move the market," Masaru Yamano, general manager of equities at Taiheiyo Securities told Reuters.
Thursday's drop was the third consecutive losing session as investors continued to fret about the effect of a strong yen on the earnings of some of the larger blue chips, which are heavily reliant on exports.
"(The strong) yen is responsible for today's decline. Electronics shares, for example, would have performed much better without it," said Hidenori Karaki, a general manager at Tokyo Mitsubishi Personal Securities.
The yen traded at 110.91 against the dollar late afternoon, down from its New York level of 111.14 yen overnight.
Most high-tech shares closed lower despite the overnight rally on the Nasdaq. Canon closed 2.3 percent lower at 3,320 yen after first-half earnings fell 45 percent. Matsushita fell 3.8 percent to 2,260 yen.
A U.S. market rally Wednesday, after the quarter-point increase in interest rates by the Federal Reserve the previous day, failed to inspire Japanese investors.
The Dow Jones industrial average gained almost 43 points to close at an all-time high of 11,326.04. The tech-heavy Nasdaq rallied almost 2 percent, while the S&P 500 rose 1.3 percent.
In Hong Kong, the Hang Seng closed just short of a 1 percent gain at 13,608.38, a gain of 12 points. The Wall Street rally helped pull the market back up after a losing session Wednesday. Sentiment was also lifted by expectations of strong earnings reports from a number of blue chips.
Gains were capped, however, by expectations of a rate hike which is widely anticipated at the end of the week. The Hong Kong dollar is pegged to the U.S. currency, so the cost of borrowing closely tracks U.S. interest rates.
Sydney's All Ordinaries managed weak gains to end 0.4 percent higher at 3,046.1. A rally in domestic bonds and a number of strong blue chips earnings reports underpinned the market as the dominant resource sector fell 1 percent.
A bank rally helped the Straits Times index in Singapore to close 1.2 percent higher at 2,162.54. The buying was prompted by a planned change in the share structure of the big four banks, which involves the removal of the split between local and overseas shares.
All other markets in the region closed in the red. South Korea's Kospi finished 0.3 percent lower at 959.88 while Manila's Composite closed 1 percent lower at 2,236.71.
Taiwan's Weighted index also closed in the red, down 0.4 percent at 8,097.57.
Kuala Lumpur's blue-chip index lost 0.9 percent to end at 761.75, while the JSX index in Indonesia lost 0.6 percent to close at 581.51.
The Set index in Thailand was hit by a bank sell-off, as it tumbled 2.7 percent to finish at 456.07.
-- from staff and wire reports
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