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Tokyo stunned, HK slammed
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April 17, 2000: 7:15 a.m. ET
Nikkei ends down 7% as government plans intervention; HK slumps 8.5%
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LONDON (CNNfn) - Asian stock markets crumbled Monday as investors dumped equities to seek safety in cash and bonds in reaction to record losses on Wall Street Friday. Tokyo ended down 7 percent while Hong Kong closed 8.6 percent lower, recording its second-largest points drop.
Technology-related shares suffered the sharpest falls, but the selloff extended across the board as traders expressed little confidence that the market had bottomed out. Investors anticipated further declines in U.S. stock markets, weakened by higher-than-expected inflation numbers released last week.
The carnage on U.S. markets Friday saw the blue-chip Dow Jones industrial average plunge 5.7 percent while the tech-heavy Nasdaq composite fell 9.7 percent in its worst-ever one-day decline.
Tokyo's benchmark Nikkei 225 closed down 1,426 points, or 6.98 percent, at 19,008.64, its lowest close since Jan. 25, as falls extended far beyond the vulnerable technology sector. The slide prompted the Japanese government to outline plans to prop up the market by pumping in as much as ¥1 trillion ($9.65 billion).
In Hong Kong, the Hang Seng ended down 1,380 points, or 8.55 percent, at 14,762.37 as a mid-afternoon rally quickly faded, to leave the market's telecom and technology shares nursing heavy losses.
Singapore's Straits Times lost 8.7 percent to end at 1,999.39, some 20 points above its session floor. In Seoul, the Kospi index was the region's biggest casualty, closing down 11.63 percent at 707.75.
Nikkei to bounce back?
However, market strategists said they expected the Nikkei to bounce back, and reported that there was relatively little selling pressure, as most of the declines were driven by futures and arbitrage.
"The selloff was probably worse than many expected," Garry Evans, chief equity strategist at HSBC Securities in Tokyo told CNNfn.com. "What was odd was that there was no sense of panic."
The Tokyo index bottomed at 18,603 just after midday, weakened by an announcement that 30 index members will be dropped from the Nikkei 225 on April 24.
In the currency markets, the dollar lost ground on the prospect that overseas investors may withdraw cash from dollar-denominated securities if Wall Street falls further Monday. The yen advanced to 103.96 per dollar from 104.74 in late Friday trade in New York.
In Tokyo, blue-chip technology shares were the first to lose ground, and though there was some recovery at the end of the session, Sony Corp. ended off 9.3 percent, NEC Corp. lost 10.8 percent and Toshiba fell 8 percent. The losses extended into the industrial and financial sectors, with Honda Motor losing 5 percent and Sanwa Bank closing with a 7 percent loss.
Brokerages also suffered sharp declines, with Daiwa Securities plunging 17 percent and Nomura Securities nursing a 14 percent decline.
Evans at HSBC said the government's plan to prime the equity markets with public funds would have only a marginal impact: state pension funds traditionally are invested at the start of the financial year, so the addition of further government money may have less impact than at other times.
He said the lower concentration of tech stocks in Japan's benchmark index would mute the effect of further falls on Wall Street.
"If the U.S. continues to correct over the next few days it could be nasty for Japan, but the market fundamentals are much better here," said Evans.
Hong Kong suffers
Hong Kong's Hang Seng, which is the most closely tied in Asia to Wall Street's fortunes, fell as low as 14,739, some 8.7 percent below Friday's close, with telecom shares suffering the most.
China Telecom, the market's largest stock by market value, closed down 15.2 percent, SmarTone Telecom was 13 percent lower and Cable & Wireless HKT lost 11.7 percent.
Chueng Kong (Holdings) fell 10.6 percent and subsidiary Hutchison Whampoa lost 11 percent.
HSBC Holdings fell more than 2 percent as the selling pressure extended to financial stocks. Even typically defensive sectors such as utilities could not escape: HK & China Gas lost 5.5 percent.
Singapore Telecom led the Straits Times lower, losing 6.5 percent at the close, but tech shares such as electronic circuit designer Datacraft were worse hit, closing down 20 percent.
Among smaller markets, Sydney's new S&P/ASX200 index ended down 5.4 percent at 2,943.9. Media group News Corp. plunged 14 percent as investors bailed out of the sector and reacted to the news that chairman Rupert Murdoch was receiving treatment for prostate cancer, focusing attention on uncertainty over his succession.
Taiwan's TAIEX index was the only market in the region to gain ground, though it had fallen 5.4 percent during Saturday trade. Demand for electronics stocks pulled the index 1.43 percent higher to close at 8,993.68
Elsewhere, the only direction was down, though falls were more modest than on the Big Three Asian markets. Manila's PSE Composite ended down 4.38 percent at 1,637.54, the Set in Bangkok closed down 5.2 percent at 392.88, Kuala Lumpur's KLSE Composite shed 6 percent to close at 392.88 and the JSX index in Jakarta was down 4.9 percent at 529.26. 
-- from staff and wire reports
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