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Asian 2002 stock rally ends



HONG KONG, China -- Asian stocks crunched to a lower close for the first time in 2002 on Tuesday.

Tokyo's Nikkei index dropped 2.26 percent to 10,695.60, after closing at a six-week high on Monday.

Investors said a correction was in order after a strong start to trading in Asia in 2002. The broader Topix slid 2.21 percent to 1,031.77.

Almost all Asia Pacific markets sank, with the exception of Singapore, which pared gains but still ended in the black.

Mumbai's market was also trading up. The main Bombay Stock Exchange index stood at 3,443.68, up 1.23 percent, gaining pace as India trading moved into afternoon.

China plays off on rules change

But Taiwan closed 0.4 percent lower, Hong Kong fell 1.5 percent and South Korea dropped 2.2 percent.

Markets in both Australia and New Zealand lost ground. And China's stocks, the strongest performers in the world in 2001, took Tuesday on the chin.

The Shanghai B share market fell 4.63 percent and Shenzhen B shares dropped 4.89 percent, as China's market watchdog banned domestic brokerages from buying B shares on their own accounts.

Overseas investors can only buy B shares, with A share listings are limited to Chinese investors. They also fell, but only 0.7 percent in Shanghai and 0.8 percent in Shenzhen.

The yen was again center of attention in Asia, as it burst back above 132 to the dollar.

Traders again viewed official comments as approval of a weaker currency.

Economics Minister Heizo Takenaka sparked today's move, saying the decline is "not far off economic fundamentals."

Tokyo traders lock in Sony gains

After a four-day winning streak, though, investors locked in profits on major tech issues such as Sony Corp.

Sony is a big exporter and likely to gain from yen weakness in the long run. But on Tuesday, its stock fell 1.7 percent to 6,360 yen. It hit a five-month high during Monday trade.

"This is what happens when U.S. stocks take a break," Yuji Nakamura, strategist at Shinko Investment Trust Management, told Reuters.

He said that in the end, the Japanese market is still looking to the United States for direction.

The yen exchange rate has risen nearly nine yen or 7.0 percent since early December. Despite the boost to exporters, the weakness is a sign of fundamental problems in Japan, experts say.

"The yen is a yardstick for sentiment," Marc Desmidt, director of Japan stocks at Merrill Lynch Investment Managers, told Reuters news agency. "We think that Japan is having a bad situation, so you sell Japan, you sell the yen."

With Japan's banks trying to arrest their mounting bad debts, some professional investors see the Nikkei falling under 10,000 again sometime in the first quarter.

Major banks fell after gains on Monday. No. 3 Mitsubishi Tokyo Financial Group fell the fastest, down 4.95 percent to 865,000 yen.

One of a small number of gainers was Fast Retailing Co., which soared 6.36 percent to 12,550 yen.

Japan's top casual wear retailer said it would get in the food business. But it downgraded profit forecasts.

Mining stocks fall in Sydney

In Australia, the S&P/ASX 200 index fell 0.69 percent to 3,423.0.

Investors cited the declines on Wall Street on Monday as the main drivers. The Dow Jones industrial average fell 0.61 percent. Nasdaq dropped 1.08 percent.

Mining stocks, a recent source of strength, held up much of the day but fell to selling by the close.

BHP Billiton dropped 0.36 percent to A$11.20. Rio Tinto fell 1.3 percent to A$37.85.

Australia's biggest listing, Rupert Murdoch's media empire News Corp., fell 1.15 percent to A$15.48. Likewise, it succumbed to afternoon selling after showing gains earlier in the day.

Takeover target Normandy Mining locked in a one cent gain to A$1.86, as AngloGold said it was still considering whether to improve its offer for the gold producer.

Bank stocks also fell Down Under, led by ANZ, off 2.36 percent to A$17.39.

New Zealand's NZSE-40 capital index closed down 0.26 percent at 2,082.55.

Telecom New Zealand, the biggest listing and around 22 percent of the index, fell 0.8 percent to NZ$5.17 on light trade.

Takeover target Frucor rose 1 cent to NZ$2.31, after its directors on Tuesday recommending accepting French food maker Danone's NZ$2.35 a share offer for the juice maker.

Hong Kong off on China cell phone plays

In Hong Kong, the Hang Seng fell 1.5 percent to 11,713.71, snapping a three-day winning streak.

Like Japan, investors were fretting the market was getting ahead of itself.

Leading the market lower were China's two cell phone companies. China Mobile dropped 2.99 percent to HK$27.55. China Unicom shed 2.81 percent to HK$8.65.

They face more competition in the next two years after Beijing confirmed that it plans to issue two more mobile phone licenses in China, brining the number of cell phone providers to four.

Anglo-Chinese bank company HSBC Holdings, the largest listing in Hong Kong, tumbled 2.37 percent to HK$92.75, on persistent worries about its exposure to Argentina.

Property stocks were the main source of strength in Hong Kong, Sun Hung Kai Properties climbing 1.08 percent to HK$70.

Kospi drops

In South Korea, the Kospi index dropped 2.2 percent to 734.76. That snapped a run of eight days of rises in Korea.

Seoul stocks have roared into 2002 on chip gains. But on Tuesday, Samsung Electronics fell 2 percent to 311,500 won.

It reported a 380 billion won pre-tax loss for the third quarter and got little boost from reports it will likely raise prices.

Fellow memory chip maker Hynix Semiconductor dropped 1.9 percent to 2,805 won.

Taiwan's Taiex index fell 0.43 percent to 5,810.08. They hit a nine month high during the day, at 5,885.60.

Taiwan Semiconductor Manufacturing Co. dropped 2.2 percent to T$90.50 and United Microelectronics was off 3.8 percent to T$50.50.

They make up some 15 percent of the Taipei market and are favorites of overseas investors.

Singapore's Straits Times index was virtually alone in posting a rise for the day.

It ended up 0.48 percent at 1,704.02. Banks and big-cap stocks made the running.



 
 
 
 



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