Nikkei closes at fresh 18-year low

HONGKONG, China -- Japan led Asian markets to a lower close Tuesday. Tokyo's benchmark Nikkei index closed at a new 18-year low.

Tech stocks and blue chips tracked Wall Street's Monday decline. Korea was one of the rare markets to close higher.

The Nikkei 225 average dropped sharply for a third straight session, shedding 1.62 percent or 156.33 points to 9.475.60 to close at a fresh 18-year low.

That came on growing doubts that Japan's government will be able to deliver on pledged structural reforms.

The broader capital-weighted Topix index tumbled 17.24 points or 1.83 percent to 926.27 -- a 17-year low.

Analysts said institutional investors, including overseas players, were dumping blue-chip issues such as Sony Corp and Toyota Corp, mainly due to disappointment over instability on the political front.

The fate of the painful but vital economic reforms pledged by Prime Minister Junichiro Koizumi has been in doubt since the sacking last week of popular Foreign Minister Makiko Tanaka. Koizumi saw his approval rating drop after the move.

Sony, the world's consumer electronics leader, fell 3.61 percent to 5,600 yen, underlining a decline for tech shares following Nasdaq's 2.91 percent drop in the U.S. Monday.

Brokers also extended their tumble across the board. They expect the dim outlook for stocks to affect their mainstay revenues from commission. Nomura Holdings, Japan's top broker, fell 4.45 percent to 1,245 yen.

But Mizuho Holdings, the world's largest bank by assets, rose 3.45 percent to 210,000 yen.

In the auto sector, top carmaker Toyota dropped 4.11 percent to 3,270 yen, while Honda Motor slipped 4.48 percent to 5120 yen.

Honda, Japan's second largest automaker, said after the close that its third-quarter operating profit climbed 60.7 percent to a record 154.78 billion yen ($1.17 billion), fueled by a weak yen and healthy sales.

Chip shares on the rise

Shares in Seoul snapped a five-day losing streak as chipmakers advanced on rising chip prices.

The bellwether Kospi finished up 1.33 percent at 739.91, while the over-the-counter Kosdaq advanced 0.09 percent to 74.35.

Samsung Electronics, the world's top memory chipmaker, rose 3.53 percent to 323,000 won after Samsung Securities upgraded its rating to "strong buy," citing increasing operating profit.

Spot prices for chips are also expected to go higher after Hyundai Securities announced that Dynamic Random Access Memory (DRAM) chip contract prices for Hynix and Samsung rose to $4 in early February.

Anam Semiconductor firmed 9.7 percent to 8,400 won, as the non-memory chip foundry expects sales to grow 70 percent this year.

Mirae Corp, a chip equipment maker, finished limit-up by 15 percent at 2,790 won.

Hynix Semiconductor, the world's third largest memory chipmaker, added 0.8 percent to 2,470 won on news its chief executive was in the United States to complete alliance talks with U.S. rival Micron Technology.

Resources up

The Australian stock market lost ground in late trade to finish lower, although buoyant resources stocks helped protect the local bourse from Wall Street's retreat.

The benchmark S&P/ASX 200 index closed 14.6 points or 0.4 percent weaker at 3,415.5.

Media giant News Corp closed 2.7 percent lower at A$13.19 due to ongoing concern about U.S. corporate earnings. Heavyweight telco Telstra also slipped 1.5 percent to A$5.34.

But the gold sector continued to shine following a sharp rise in the gold price overnight and evidence of a fragile U.S. dollar.

Leading gold producer Normandy Mining added 3.2 percent to A$2.28 after posting a 33 percent rise in first-half net profit to A$83.5 million.

Global miner BHP Billiton jumped 1.1 percent to A$11.69 following reports it was cutting 1,000 staff as part of global downsizing. Rival Rio Tinto firmed 0.2 percent to A$40.64.

Banks, on the other hand, were mixed following their recent strong run. National Australia Bank and Commonwealth Bank both shed about 1.8 percent.

Bargain hunting

In Taiwan, shares ended a touch lower after late bargain hunting for tech shares helped pare early losses triggered by Wall Street's slump and pre-holiday caution.

The benchmark Taiex ended 5.60 points or 0.10 percent lower at 5,844.25.

Microchip designer Mediatek Inc rose 3.49 percent to T$682.

United Microelectronics, the world's second largest contract chip maker, gained 0.66 percent to T$46.10 after announcing on Tuesday it has sealed manufacturing agreements with specialty chipmaker Cirrus Logic and integrated circuit designer Synopsis.

UMC's rival Taiwan Semiconductor Manufacturing (TSMC) fell 0.58 percent to T$85.50.

In other markets, Singapore banks and blue chips sank by midday as Wall Street's decline rocked sentiment, but technology stocks inched up on positive news.

The bellwether Straits Times Index was down 1.73 percent or 30.18 points at 1,727.66 in late afternoon trade.

Analysts said tech stocks rose primarily because of improved consumer sales of computer and printer maker Hewlett-Packard, and a semicon equipment upgrade from Goldman Sachs.

Chartered Semiconductor Manufacturing rose 0.93 percent to S$4.32.

The finance sector edged lower as DBS Group Holdings dropped 3.4 percent to S$14.30, OCBC Bank fell 1.5 percent to S$13.10, and United Overseas Bank shed 1.35 percent to S$14.60.

Media conglomerate Singapore Press likewise slumped 3.64 percent to S$21.20.

Shares in Hong Kong also ended lower, with the benchmark Hang Seng Index falling 112 points or just over 1 percent to 10,609.19.

Banking giant HSBC Holdings slipped 1.42 percent at HK$86.50.

But China's top personal computer maker Legend Holdings bucked the market with shares up 0.73 percent at HK$3.45.

Legend shares got a boost after the company announced a 17 percent year-on-year increase in core earnings for the quarter ended December 31.