Japan holds line as Asian stocks plunge


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

TOKYO, Japan (CNN) -- Asia's main markets apart from Japan are sharply lower heading into Monday afternoon trade.

Their dip follows the steep decline on U.S. markets Friday, where the Dow Jones industrial average plunged more than 4.5 percent to reach its lowest point since 1998.

Japan's Nikkei index shed 1.8 percent at the opening to 10,019 points, and briefly dipped below 10,000 points before recovering to 10,239.12 by midday, for a modest gain of 0.36 percent.

The broader Topix is up 1.39 points or 0.14 percent to 991.10.

But other markets in the region are in the red. Australia's S&P/ASX200 is down just over 1 percent to 3075.5 after touching a fresh nine-month low in morning trade.

South Korea's Kospi also fell sharply at the open, dropping 3.88 percent before recovering slightly to a midday loss of 22.85 points. That left it down 3.03 percent to 731.77.

In Hong Kong, the Hang Seng index is down 2 percent to 10,112.79.

New Zealand's Top 40 index is also down about 2 percent to 2006.66.

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

In Australia, heavyweight media group News Corp, which gets most of its revenue in the U.S., is off more than 5 percent to A$9.30, its lowest level for more than three years.

Resources stocks such as BHP Billiton and Rio Tinto are also lower, along with big banks NAB, Commonwealth Bank, Westpac and ANZ.

Samsung, SK Telecom lower


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

In Seoul, Samsung is down 3.07 percent to 331,500 won and SK Telecom is almost 2 percent lower at 250,500 won.

Steelmaker Posco is down more than 3 percent. Hyundai Motor, which was a rare gainer in early trade, has fallen just into the red at 32,250 won.

Singapore's Straits Times is off 1.9 percent to 1530.55 heading towards midday, with bank leader DBS Group off 2.36 percent to S$12.40 and Creative Technology down 2.8 percent to S$17.10.

Taiwan's Taiex is down 2.4 percent to 5037.83.

Among technology stocks, Taiwan's two big chip foundries TSMC and UMC are lower by 1.6 percent and 3.4 percent respectively.

Via Technologies is down 3.4 percent to T$70.50 and Asustek Computer is 3 percent lower at T$98.00.

In Hong Kong, the market is broadly lower. Conglomerate Hutchison Whampoa is down 3.34 percent to HK$56.25. China Mobile is off 2.7 percent and banking giant HSBC is 0.85 percent lower at HK$87.00

Bracing for the worst

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, the parent of CNN.