Shocked Taiwan takes Asia stocks down


Taiwan's market dropped almost 5.8 percent after comments by President Chen about the island's "separate" status

Staff and wires

TOKYO, Japan (CNN) -- A shell-shocked Taiwan led Asia stocks to a lower close Monday, with even Japan drifting into the red after a positive start to the day.

For once the focus was outside Tokyo. All eyes were on Taipei, where the market posted by far the region's biggest loss -- a 5.78 percent fall for the Taiex.

That came after weekend comments by President Chen Shui-bian that Taiwan is a separate country from China, sparking an angry reaction from Beijing.(Full Story)

The Taiex plunged 284.22 points to 4636.67, with companies invested in mainland China taking some of the biggest hits. Both Asustek Computer and Hon Hai Precision lost almost 7 percent.

China regards Taiwan as a renegade province that eventually will be reunited with the mainland -- by force, if necessary. China's foreign ministry reaffirmed Monday it will not tolerate any moves towards independence by the island.

Nikkei higher


Sony and other high-tech issues closed lower on a day when the Nikkei average ended just in the red

In Tokyo, the benchmark Nikkei 225 average closed flat, finishing the day just 4.73 points lower at 9704.93. That came after a strong morning session which saw the index add 57.58 points or 0.59 percent to 9767.24.

The broader, capital-weighted Topix index finished 0.05 percent lower, off just 0.45 points at 955.36.

The falls came as the government released a forward indicator painting a brighter picture ahead for Japan's economy(Full Story).

Japan's big banks were mixed, with Mizuho and UFJ slipping into the red, but MTFG and SMBC making gains. SMBC did best, adding 4 percent to 645 yen.

Stocks dependent on domestic demand, such as utilities, ended firmer. Tokyo Electric Power rose 1.6 percent to 2555 yen.

Mobile phone leader NTT DoCoMo put on 6000 yen or 21.8 percent to 282,000 yen. Parent NTT was also higher.

But big exporters were again down, with consumer electronics leader Sony off 2.1 percent to 5110 yen and automaker Toyota down 1.4 percent. High-tech issues such as Fujitsu, Hitachi and Toshiba were lower, Hitachi dipping 3.5 percent.

Fast-food giant McDonald's Japan closed at a record low of 2680 yen, down 1.47 percent as it began offering hamburgers at the cut-rate price of 59 yen(Full Story)

Tokyo Electron, Japan's biggest producer of chipmaking equipment, plunged 7.47 percent to 5200 yen after the company cut its full-year targets on Friday.

Vulnerable to change

"People have been shying away from high-tech issues, which are vulnerable to changes in external demand. But they are bullish on those dependent on domestic demand," Kazuyuki Naito of UFJ Tsubasa Securities told Reuters news agency.

There was no joy for Asia from U.S. figures. Wall Street ended last week with a down day Friday. The Dow Jones industrial average lost 2.3 percent or 193.49 points to 8313.13. The tech-heavy Nasdaq composite index fell 2.5 percent or 32.08 points to 1247.92 (Full U.S. roundup).

Major markets in the region responded by closing broadly weaker. Only New Zealand finished strongly in the black, up half a percent to 1991.9. Mumbai's BSE Sensex is up a little in early trade.

In South Korea, the Kospi dropped a sharp 3.56 percent to 675.76 points, with tech issues SK Telecom and Samsung Electronics leading the falls.

Samsung eased 3.3 percent to 309,000 won and SK Telecom dropped 3.9 percent to 209,500 won.

Steelmaker Posco dipped 5.26 percent to 108,000 won.

Australia softer


Australian stocks weakened after poor jobs data and a warning by a business lobby group that the economy is softening

In Australia, the benchmark S&P/ASX200 lost 44.7 points or 1.46 percent to 3009.2 after newspaper job advertisements eased slightly in July and a business lobby group warned that the economy was softening.

Bluechips including Telstra, News Corp and resources leader BHP Billiton all ended lower, as did the big banks. News lost 4.2 percent to A$8.81.

Insurer and funds manager AMP continued to decline, touching a record low of A$13.44. Beer and wire group Foster's was a rare gainer.

In Singapore, the Straits Times index is down about 1.68 percent to 1484.55 near the close. DBS Group is off 2.5 percent to S$11.80.

Hong Kong's Hang Seng index fell 1.29 percent to 9862.33 as bluchips eased across the board. Cheung Kong Holdings, Hutchison Whampoa and Johnson Electric were down between 2 and 2.5 percent.

HSBC was flat at HK$85.25 ahead of its first half earnings.