Asian stocks open sharply lower


The U.S. woes are creating a drag on the struggling Japanese economy

TOKYO, Japan (CNN) -- Main markets in Asia opened sharply lower Monday after the Dow Jones industrial average plunged more than 4.5 percent in New York on Friday to reach its lowest point since 1998.

Japan's Nikkei index shed 1.8 percent at the opening to 10,019 points, Australia's S&P/ASX200 lost 1.64 percent, South Korea's Kospi fell 3.88 percent and New Zealand's Top 40 index slipped 2.24 percent.

But Japan is moving against the trend as the day progresses, and South Korea is also doing a little better.

The Nikkei briefly dipped below 10,000 points before recovering to 10,236 by mid-morning, for a modest gain of 0.32 percent. The broader Topix is up 1.98 points or 0.2 percent to 991.69.

Technology stocks are down, led by big-cap names such as Sony and DoCoMo in Japan, and Samsung Electronics in South Korea. But big banks in Japan are stronger.

Australia's market is down about 1 percent near midday. Heavyweight media group News Corp, which gets most of its revenue in the U.S., is off about 4.7 percent to A$9.34, its lowest level for more than three years.

The Kospi is down 2.93 percent to 732.49, with Samsung down 2.5 percent and SK Telecom 1.37 percent lower to 252,000 won.

Steelmaker Posco is down more than 3 percent. Hyundai Motor is a rare gainer, up 1.38 percent to 32,900 won.

Singapore's Straits Times is off 1.3 percent to 1540.12, and Taiwan's Taiex is down 2.24 percent to about 5045.

Taiwan's two big chip foundries TSMC and UMC are lower by 1.6 percent and 3.0 percent respectively.

Bracing for the worst


Samsung posted record figures for the second quarter but investors took that as time to sell

Asian financial markets generally are bracing for another wild week after U.S. stocks plunged again at the weekend, sparking fears of a 1987-style crash on Wall St.

The Dow is at 8019 points, with further falls predicted when the U.S. markets re-open Monday.

The specter of a repeat of the October 1987 "Black Monday" crash prompted chairman and CEO of the New York Stock Exchange Dick Grasso to call for a "war against terrorism in the board room" to boost investor confidence and reverse last week's dramatic slumps.

The 1987 market crash saw the Dow Jones index plummet 508 points or 22 percent on the Monday following a 108-point-drop the previous Friday.

Grasso said Sunday a "small number" of bad executives had soured the investing public, but he remained optimistic.

"Investors unfortunately have been disappointed by a number of failures on the part of some companies to be truthful and honest," Grasso said.

Dismal Friday

"But the market has historically always responded to the economy, and the economy is strong."

In the short term however, the U.S. woes spell only bad news for Asian markets.

Asian stocks ended last week with a thud on Friday. Japan fell the hardest, having gained the most the day before.

The tech-fueled Nikkei index slumped 2.82 percent to 10,202.36, while the Topix broke below 1000 again, falling 2.02 percent to 989.71.

South Korea fell almost 2.5 percent. Taiwan, Australia and Hong Kong all fell a little over 1 percent. Singapore closed 1.25 percent lower.

'Pretty ugly'

The Dow Jones has now fallen more than 20 percent for the year, including 7.7 percent in the last week.

U.S. investors are now looking for just about anything to break the selling spell as a slew of corporate earnings reports hit the news wires.

"It was pretty ugly [last week]. We've got a lot of earnings to get through in the next week. I'm hoping there will be an absence of bad news and maybe that can help us," Ross Margolies, portfolio manager at Salomon Brothers Asset Management, told CNNfn.

Of the more than 20 percent of the Standard & Poor's 500 companies that have already reported quarterly profits, 60 percent have topped estimates, 28 percent have met estimates, and 12 percent have missed, according to First Call, which tracks Wall Street profit forecasts.

Companies due to release results this week include Dow components 3M and American Express, as well as AOL Time Warner and Martha Stewart Living Omnimedia.