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Rate fears depress Asia
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February 18, 2000: 6:42 a.m. ET
HK, Singapore slide 2% after Greenspan warning; yen steadies Nikkei
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LONDON (CNNfn) - Blue-chip share indexes in Hong Kong and Singapore tumbled Friday, shedding more than 2 percent after hawkish comments on global interest rates from U.S. Federal Reserve chairman Alan Greenspan.
A slide in the yen cushioned the Tokyo market, which closed little changed from the previous session. The benchmark Nikkei 225 fell just 2 points to 19,789.03, after gains early in the session were countered by declines in utility shares. The index advanced 0.4 percent in the week.
The Hang Seng index in Hong Kong was hit harder by Greenspan's remarks, falling 382 points, or 2.25 percent, at 16,599.16. The Straits Times index in Singapore suffered a similar fate, closing down 2.36 percent at 2,177.36.
Asian markets had received mixed signals from Wall Street in the wake of Greenspan's congressional testimony, which hinted strongly at further interest-rate hikes to cool the U.S. economy. The Nasdaq soared 2.4 percent to close at a record 4,548.87, but the Dow Jones industrial average shed 47 points to end at 10,514.57, while the broader S&P 500 moved fractionally ahead to end at 1,388.25.
Greenspan's remarks and a downbeat assessment of Japanese growth prospects from Economic Planning Agency chief Taichi Sakaiya pulled the yen back to a five-month low against the dollar of 110.97.
Tokyo investors also brushed off the prospect that ratings agency Moody's Investors Service may downgrade the country's sovereign debt. Overseas investors continued to be net buyers of equities while domestic investors focused mainly on tech-related issues.
Nissan Motor jumped 10.4 percent following upbeat earnings Thursday from European partner Renault (PRNO), which owns a 36 percent stake in Japan's third-largest auto player. Honda Motor and Mazda both gained more than 2 percent though market leader Toyota Motor fell 1 percent.
Exporters enjoyed the yen's weakness, sending bellwether consumer electronics manufacturer Sony Corp. up 2.6 percent. The stock also gained from reports that it was now accepting online orders for its new PlayStation 2 game console.
Rival video game maker Sega Enterprises jumped 7.1 percent, recovering from Thursday's slide after it revealed it was being sued for patent violations. NEC rose 2.7 percent after announcing it would take a 30 percent stake in online auctioneer eBay Japan.
Among utility stocks, Tokyo Electric Power announced it was delaying a new power supply contract for a year because of weak economic conditions, sending its shares down 7.5 percent. Hitachi, one of the key suppliers, lost 2.3 percent.
In Hong Kong, financial and property shares declined on Greenspan's remarks, paring recent gains.
HSBC Holdings, the largest bank, ended 1.9 percent lower, and Bank of East Asia lost 3.5 percent. Among property plays, Cheung Kong (Holdings) lost 3.7 percent while New World Development shed almost 6 percent.
Telecoms were also mostly lower, with China Telecom sliding 4.1 percent after hitting a record high earlier in the week, while SmarTone lost 3.8 percent. Takeover target C&W HKT bucked the trend, posting a slight advance.
The Hang Seng fell 3.8 percent this week from its Feb. 11 close.
Singapore also suffered heavy selling of its heavyweight components, with the country's largest bank, DBS Group, ending 2.8 percent lower. Media group Singapore Press Holdings and Singapore Airlines both fell 3.3 percent
Tech shares also lost ground, with Creative Technology down 2 percent and Venture Holdings ending 6 percent lower. The index dropped 1.75 percent over the week.
Among smaller markets, interest-rate concerns also took their toll. The All Ordinaries in Sydney closed down 0.8 percent at 3,120.10 and Taiwan's Weighted index fell 1.04 percent from its 10-year record Thursday, closing at 10,096.38. The Kospi in Seoul continued its volatile run, ending down 2.05 percent at 79.14.
The PHS Composite in Manila closed up 0.8 percent at 1,884.28 after chalking up heavy losses earlier in the week. Thailand's Set also recovered some ground, closing 0.6 percent ahead at 408.35, while the KLSE Composite in Kuala Lumpur added 0.6 percent at 1,013.27. The JSX in Jakarta closed fractionally down at 599.57. 
-- from staff and wire reports
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