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[THECANADIEN]

Asian shares plummet on Nasdaq`s fall

March 12, 2001
Web posted at: 6:15 PM HKT (1015 GMT)


By Staff and wire reports

HONG KONG, China -- Stocks in Asia plummeted Monday.

High-tech sectors buckled under Nasdaq`s 5.35 percent slide last Friday.

Political problems in Japan and Indonesia also heaped pressure on the yen and the rupiah.

Benchmark indices in Tokyo, Hong Kong, Seoul, Taipei and Singapore sagged from the outset. Australia also closed down.

Tokyo`s tech-sensitive Nikkei index finishing at a fresh 16-year low. It closed down 3.75 percent, or 457 points at 12,171.

That was its lowest finish since April 1985, as investors balked at the ruling coalition`s reforms and sold off techs. It followed a minor 0.18 percent drop on Friday.

The broader Topix index ended at 1,206, down 2.6 percent. The Topix closed up slightly on Friday.

Nasdaq fell 5.35 percent to close at 2,053 Friday, on bad news from tech leaders such as Cisco and Intel. There are also fears the Federal Reserve may not aggressively cut interest rates.

Analysts said Nasdaq could soon pierce 2,000.

Nasdaq`s poor health prompted follow-through selling of Japanese technology and communications issues. Leading Tokyo`s decline were chip shares, including NEC Corp.

Japanese markets shrugged off an 0.8 percent rise in fourth-quarter gross domestic product. Economists chalked up the unexpectedly high number as a one-off quirk and said most indicators still pointed down.

Worries that a shake-up in the Japanese government could hamper passage of economic-reform measures to boost investing also took it to stock prices.

The yen was trading back over the 120 mark it crossed last week. It was at 120.52 to the U.S. dollar on the Tokyo foreign exchange market on Monday afternoon. But it had rallied after hitting a 20-month low of 120.62.

South Korea`s shares also ended sharply lower as investors unloaded technology stocks.

Key tech blue chips SK Telecom and Samsung Electronics both fell more than four percent.

The Korea Composite Stock Price Index closed down 3.66 percent at 545.05. The over-the-counter Kosdaq ended down 5.53 percent at 72.33.

Besides techs, investors outside Korea also sold banks heavily. They were disappointed with a decision by Korean creditors to support the cash-starved Hyundai Group.

In Taiwan, shares closed lower for the third straight session as heavyweight electronics stocks took their cue from Nasdaq.

The electronics subindex slid 1.55 percent, to end at 269, extending Friday`s 1.11 percent fall. The benchmark TAIEX closed down 1.72 percent at 5,582.67. Analysts said tech shares would continue to face corrections in coming sessions because of Nasdaq weakness.

In Hong Kong, the blue-chip Hang Seng Index lost 418 points, or 2.9 percent.

It closed at 13,777, making it one of the worst-performing markets in Asia and bringing it to its lowest point in 10 months. On Friday, the index had slipped 14,60 points, or 0.1 percent.

Hong Kong property stocks were hurt by fears interest rates would not come down as sharply as previously expected. Hong Kong`s interest rates track U.S. rates closely because the territory`s currency is pegged to the U.S. dollar.

Among the casualties were property group Sino Land and global banking group, HSBC Holdings. HSBC was weighed down by a report the company plans to lay off 1,200 staff in Hong Kong.

The Hang Seng properties sub-index fell 4.26 percent, nearly erasing its gains for the year.

The Australian share market closed lower, too. Declines in banking and media stocks dragged prices, particularly with News Corp.

It dropped on concerns over its attempts to acquire U.S. satellite company DirecTV. Australia`s All Ordinaries Index fell 11.10 points, or 0.34 percent, to 3,265.80.

Philippine shares also closed lower in thin volume. The 30-company Philippine Stock Exchange Index fell 1.3 percent, to 1,568.

"We just followed what happened in the U.S.," said Astro del Castillo, research head of A&A Securities in Manila.

New Zealand`s markets bucked the Asian stock downturn. Despite mixed overall trading, the main NZSE-40 Capital Index rose 2.45 points, or 0.1 percent, to 2,076.

The yen`s woes paled next to the rupiah`s. The Indonesian currency crashed to a low of 11,210 against the U.S. dollar. That`s its worst since September 22, 1998.

Southeast Asian currencies, especially the Singapore dollar, were contending with follow-on effects of the rupiah`s fall.

Indonesia`s economic and political woes sideswiped the currency earlier in the day as nervous players bid up the dollar. There were two chief concerns, Jakarta`s frayed relationship with the International Monetary Fund and the embattled leadership of President Abdurrahman Wahid.

The rupiah managed to claw back following intervention by Bank Indonesia. But a Reuters poll on Monday predicted the rupiah could hit 12,000-15,000 by the end of June, if the situation in Indonesia does not improve.

The IMF has delayed since December a $400 million loan to Jakarta over concerns about central bank independence, regional autonomy and asset sales.

The Associated Press & Reuters contributed to this report.

[THECANADIEN]

Nasdaq 2,000 risk looms
Tech-heavy index poised for drop that would test level not seen since 1998
March 12, 2001: 8:23 a.m. ET


NEW YORK (CNNfn) - The Nasdaq composite index was at risk of being further decimated Monday -- the day some of its stocks begin trading in decimals -- and could fall below the 2,000 for the first time since December 1998.

Nasdaq-100 futures fell more than 1 percent early Monday, pointing to a sharply lower open for the Nasdaq market. Standard & Poor`s futures fell about 1 percent, indicating a weak start for the S&P 500 and Dow Jones industrial average.

Renewed anxiety about the outlook for technology companies -- in particular, Web portal Yahoo! (YHOO: Research, Estimates) and chipmaker Intel (INTC: Research, Estimates) -- roiled the Nasdaq late last week, turning what looked like a weekly advance into a loss. Those warnings are prone to continue over the next several weeks as the first quarter comes to an end.

The Nasdaq begins Monday`s session at 2,052.78 after a falling 5.4 percent decline Friday. The index has fallen 59 percent in exactly a year since reaching its record closing high of 5,048.62.

The Dow Jones industrial average starts at 10,644.62 following a 2 percent decline Friday. The S&P 500 kicks off the session at 1,233.42 after dropping 2-1/2 percent.

Wall Street`s woes continue to wail across Asia, with Tokyo`s Nikkei index closing Monday at its lowest level in nearly 16 years. Besides the U.S. tech concerns, anxiety about economic reforms presented last week by the Japanese government weighed on investors` minds. Technology stocks sent European markets lower at the start of Monday trading.

Treasury prices rose early Monday, helped in part by the weakness in stocks. The 10-year note yield slipped to 4.91 percent from 4.94 percent late Friday, while the 30-year bond yield dipped to 5.30 percent from 5.32 percent. Brent oil futures fell 27 cents to $26.26 a barrel in London.

American General, the Houston-based insurer, agreed Monday to be acquired by Britain`s Prudential for $26 billion in stock. Based on Friday`s closing prices, the deal values American General (AGC: Research, Estimates) at $49.52 a share, 28 percent above its Friday close.

A three-member presidential emergency panel goes into effect Monday in the labor dispute between Northwest Airlines and its mechanics union. The panel will attempt to mediate the rift, barring a strike by the mechanics for 60 days. Northwest (NWAC: Research, Estimates) shares closed Friday at $22.50, down 19 cents.

Sony, whose Computer Entertainment unit makes PlayStation 2 game console, said Monday it would join forces with Toshiba and IBM in a $400 million, five-year plan to develop a new type of microprocessor. Sony`s (SNE: Research, Estimates) American depository receipts lost 90 cents to $70.65 Friday. IBM (IBM: Research, Estimates) shares fell $7.18 to $99.29.

SPX, which supplies parts and services to vehicle manufacturers, agreed Monday to buy United Dominion Industries in a deal worth $1.83 billion including debt. SPX (SPW: Research, Estimates) shares finished Friday down $3.40 at $103.60. United Dominion (UDI: Research, Estimates) stock ended the session up 30 cents at $19.50.

Microsoft and Web auctioneer eBay announced an alliance to support their Internet technologies and services. The agreement is expected to increase eBay`s influence beyond its mainstay Internet auction site, as it sets out a programming standard for software developers. Microsoft (MSFT: Research, Estimates) shares lost $2.56 to $56.69 Friday, while eBay`s (EBAY: Research, Estimates) shares tumbled $5.12, or more than 13 percent, to $34.

Web portal Yahoo! (YHOO: Research, Estimates) Inc. agreed to settle a lawsuit with video game makers Nintendo and Electronic Arts, in which the three will work together to ensure pirated and counterfeit copies of games made by Nintendo and EA are no longer auctioned or sold over Yahoo`s Web site. The companies said that under the settlement, Nintendo and EA would drop a trademark and copyright infringement suit against Yahoo!

Shares of Yahoo! fell 69 cents to $17 Monday. Electronic Arts (ERTS: Research, Estimates) shares shed $2.69 to $50.13.

Fourteen Nasdaq issues make the switch to decimals Monday, in advance of the exchange`s full elimination of fractions scheduled for next month. The issues are Brocade Communications Systems (BRCD: Research, Estimates), Commerce One (CMRC: Research, Estimates), Copper Mountain Networks (CMTN: Research, Estimates), Cree (CREE: Research, Estimates), Extreme Networks (EXTR: Research, Estimates), Inktomi (INKT: Research, Estimates), Integrated Device Technology (IDTI: Research, Estimates), Micromuse (MUSE: Research, Estimates), Newport (NEWP: Research, Estimates), OpenWave Systems (OPWV: Research, Estimates), Rambus (RMBS: Research, Estimates), Redback Networks (RBAK: Research, Estimates), Research in Motion (RIMM: Research, Estimates) and VerticalNet (VERT: Research, Estimates).