Asian stocks lose ground on telecoms

Telecoms put pressure on markets in Hong Kong, Australia and New Zealand

By staff and wire reports

HONG KONG, China -- Asian stocks lost a little ground Thursday, as telecoms slipped in the region.

But trading was light, with investors waiting for U.S. markets to reopen after the July 4 holiday.

Australia was the worst-performing of the major markets, ending at an eight-week low.

Sony down again in Japan

In Japan, stocks were hurt by persistent weakness in bellwether Sony Corp. and concerns a high-tech profit recovery may come later than expected.

Tokyo's benchmark Nikkei average dropped 0.2 percent to 12,607.30, posting its second straight day of losses and closing at its lowest level since June 19.

The broader Topix index lost 0.26 percent to 1,274.69.

Electronics titan Sony fell for the fourth straight day, down 2.69 percent at 7,590 yen, dragging both indexes. It's at its lowest level since December last year.

The stock is still under pressure after Wednesday's recall of 560,000 mobile phones built for the mobile unit of Japan's number two carrier KDDI Corp.

"Jitters over high-tech earnings are now bleeding their way through the market," said Hideki Kamiya, fund manager at Asahi Tokyo Investment Trust Management.

Matsushita Electric Works Ltd. was the second-worst performer on the first section, plunging 10.26 percent to 1,277 yen.

The maker of building materials and lighting equipment reported worse-than-expected interim profits.

Investors say Japanese techs likely won't be a buy until U.S. tech companies report earnings for the June quarter.

But select techs rebounded after heavy selling. Chip and computer maker NEC Corp., which took the biggest beating among Japan's big five chip conglomerates in the past month, put on a modest 0.7 percent to 1,643 yen.

Banks lead Sydney lower

Stocks in Sydney reached their worst close since May 9, after banks led heavy selling in interest-rate sensitive stocks.

Blue chips also took a battering, compounding four straight days of losses since Friday's record high.

The benchmark S&P/ASX200 closed down 1.5 percent at 3377.8.

Australia's largest bank, the National Bank of Australia Ltd., unnerved the market after announcing it would write down the balance sheet value of its U.S. mortgage originator HomeSide.

NAB closed A$1.81 lower at A$31.40. Australia's three other major banks also recorded losses.

Brokers blamed wider market losses on a sharp rise in longer-term bond yields.

Telecom heavyweight Telstra Corp., which warned on earnings last month, was another drag on stocks, ending 20 cents lower at A$5.16.

Telecommunications stocks were also a drag on stocks in Wellington.

New Zealand's benchmark NZSE-40 Capital index lost 0.2 to end at 2,047.21. Its biggest stock, Telecom New Zealand, lost 10 cents to NZ$5.35, a four-month low.

Hang Seng down 1.6 percent

Hong Kong's Hang Seng Index fell 1.6 percent to end the day at 12,999.48.

Telecom company Pacific Century CyberWorks lost 2.1 percent to close at HK$2.38. It had rallied 7.8 percent on Wednesday, after announcing job cuts in its sputtering Internet businesses.

A profit warning by British telecom company Marconi was depressing stocks. Cathay Pacific Airways also slipped as a dispute with its pilots continues.

In Taiwan, stocks dipped to another six-month low. The benchmark Taiex index lost 0.63 percent to 4,709.20.

But state-fund buying cushioned the selling. The index lost more than 2 percent the day before to hit its worst close since December.

In Seoul, the benchmark Kospi closed down 0.6 percent at 593.61. Technology stocks stayed under pressure, despite a rate cut by the central bank.

The Bank of Korea cut its target of the overnight call rate by 25 basis points to 4.75 percent for July.

Samsung Electronics, the market's biggest stock, lost 2.0 percent to 193,000 won.

Singapore's stocks were also slightly lower. The Straits Times index was down 0.3 percent at 1,687.91 in mid-afternoon trading.

Reuters contributed to this report.