Largest Asian markets lag at close

By staff and wire reports

HONG KONG, China -- Japan deepened its slide Wednesday, as all the main Asian markets lost ground by the close.

That saw the Nikkei fall back below the 10,000 mark. Hong Kong dropped below the 10,300 level, and Australia fell, too.

Smaller markets like South Korea, New Zealand and China also saw declines.

Stocks in the Philippines, which have seen steep drops since the start of U.S.-led attacks in Afghanistan, hit a fresh 10-year low.

After rallying into the black by midday, Singapore's benchmark Straits Times index was posting some of the region's worst losses toward the close, down 1.2 percent.

But Asian stock losses were slight, following through from a Wall Street dip overnight on Tuesday. Trading in Asia has been quiet this week, characterized by low volumes.

Taiwan's market was closed for the National Day holiday.

Nikkei back below 10,000

In Japan, the benchmark Nikkei average closed down 46.89 points or 0.47 percent at 9,964.88. It was its first foray below 10,000 since Wednesday last week.

The broader Topix index fell more dramatically, losing 11.83 points or 1.13 percent to 1,031.17.

It was the second day of declines after the beginning of the American response to the September 11 attacks. The strikes have kept many institutional investors out of the market.

Japan's selloff was led by banks, which will suffer if the economic picture worsens. They are already beset with bad loans, which the government has promised to combat.

"By pushing down bank shares, the market seems to be urging the government to carry out speedy implementation of structural reforms," said Hiroaki Muto, general manager at Nissay Asset Management.

"When the terrorist attacks hit the United States, Japan promised to do so. But nothing much has been done since then."

Mizuho, the world's biggest bank by assets, tumbled 7.32 percent to 380,000 yen. It has lost about 27 percent since September 11, compared with a 2.5 percent fall in the Topix over the same period.

Sumitomo seen warning soon

Japan's second largest group, Sumitomo Mitsui Banking Corp., was down 6.91 percent at 741. It is widely expected to follow other major banks soon in issuing a profit warning.

Sumitomo Trust & Banking Co. lost 5.77 percent to 588 yen after the bank halved its group net profit forecast for the six months through September to six billion yen.

Starbucks Coffee Japan Ltd. had an up and down first day on the Nasdaq Japan market.

The Japanese unit of U.S. coffee giant Starbucks Corp., the first to go public, rose as much as 25 percent to 80,000 yen from its initial public offering price of 64,000 yen.

But it then fell the daily 10,000 yen limit to close at 70,000 yen. Some investment experts say the stock is simply too expensive.

In Australia, the benchmark S&P/ASX 200 index ended down 16 points, or 0.51 percent, at 3,137.0.

It fell more at the open, after a bomb scare at the American Express building. But the index rallied when it turned out that was a hoax.

A time for caution

Investors are skittish after the start of military action in Afghanistan. They were also eyeing a 0.2 percent drop in the Dow Jones industrial average and a 2.2 percent dip on Nasdaq overnight.

"Let's face it. It's obviously a time for caution," said Eric Gale, director of institutions at investment house J.P. Morgan. "People are a bit quieter and taking things a bit slower."

National Australia Bank, the country's biggest bank, fell around 2 percent to A$28.15. Investors are skeptical about its efforts to sell its U.S. mortgage unit HomeSide Lending Inc., which produced a $2.2 billion writeoff this year.

Singapore Telecommunication's Australian listed shares were six cents lower at A$1.88 in heavy trade. Its Aussie subsidiary, Optus, said it would slash 700 jobs in an effort to save A$100 million.

New Zealand's benchmark NZSE-40 Capital index closed off 0.37 percent at 1,868.

Telecom New Zealand lost one cent to NZ$4.36. The telecom is Wellington's largest listing.

Air New Zealand's B shares, open to overseas investors, lost a cent as well, but that produced a 3.3 percent drop to NZ$0.29.

In Hong Kong, the benchmark Hang Seng index ended down 0.59 percent at 10,298.24.

Hong Kong Chief Executive Tung Chee-hwa said the government would commit $243 million to state-backed funds to boost small- and mid-size businesses, as well as plan a new convention center near the new airport, to stimulate flagging Hong Kong.

But Hong Kong's largest listing, bank HSBC, fell 2.35 percent to HK$83.00 on worries about the world's gloomy picture.

China Mobile, mainland China's largest cell phone company, rose 2.65 percent to HK$25.65.

On the mainland, China's B share markets, open to overseas investors, dropped 1.44 percent in Shanghai and 1.43 in Shenzhen.

In South Korea, the benchmark Kospi dropped 0.8 percent to 503.46. Samsung Electronics, the world memory chip No. 1, fell 1.65 percet to 149,000 won, following through on U.S. chip losses.

Car maker Hyundai Motor lost 4 percent to 17,950 won.

Manila's market shattered the 1,000 barrier, as it feels a particularly heavy fallout from the start of military actions in Afghanistan.

The Philippine main stock index ended down 4.05 percent at 991.35. That's its lowest close since October 11, 1991.

It has been shaken by concern about reprisals and growing activism from Muslim militants operating in the south of the country.

The stock markets in Malaysia and Indonesia, also home to militant Muslim movements, did not see large drops Wednesday.

In fact, they fared better than most Asian exchanges, with the Kuala Lumpur main index down 0.4 percent in the afternoon and the Jakarta stock index off 0.2 percent.

The Straits Times index was at 1,364.76, a drop of 1.3 percent, heading toward the close.

Reuters contributed to this report.