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War jitters knock Japanese stocks
By Alex Frew McMillan
HONG KONG, China (CNN) -- Markets in Japan and Australia are lower on Tuesday, with investors fearing the United States will push for war with Iraq. At midday, Australia is down more than 2 percent and Japan is off 1 percent. Traders through the region are skittish ahead of George W. Bush's State of the Union address on Tuesday. But most of Asia is resisting the worst of the selling, having already slumped sharply on Monday. (War fears cause Asian slump) There are minor gains in Hong Kong, Taiwan, South Korea and Singapore. New Zealand and Malaysia are down. The increasingly hawkish tone of the Bush administration has caused financial markets around the world to sell off over the past week. (Full story) War in the Persian Gulf would disrupt international trade, drive oil prices higher and dampen international travel and tourism. War concerns hit the U.S. stock market on Monday, with the Dow Jones industrial average crunching below the 8,000 mark for the first time since October 14. The Dow dropped 1.74 percent to 7,989.56 and is now off 4.2 for the year. Nasdaq drifted 1.26 percent to 1,325.27, in the seventh day of declines out of eight for U.S. stocks. (U.S. roundup) Nikkei in general slideOn Tuesday, Japan's Nikkei average fell 1.01 percent by the lunch break, to end the session at 8,522.79. The broader Topix is down 0.97 percent at 841.81. Japan's largest listing, NTT DoCoMo, is down 0.84 percent at 235,000 yen, while rival cell-phone service KDDI is down 1.10 percent to 360,000 yen.
There was little to encourage investors, with fresh data showing that Japan's retail sales fell in December, for the 21st straight month of decline. (Full story) Banks are suffering some of the heaviest selling, with any disruption to the economy likely to hit its already shaky roster of borrowers. Mizuho Holdings is down 3.05 percent at 127,000 yen, while UFJ Holdings is down 3.36 percent to 144,000 yen. Mitsubishi Electric is down 0.95 percent at 312 yen after the company said it would essentially exit computer manufacturing, by outsourcing that business to NEC Corp. NEC is off 1.91 percent to 461 yen. (Full story) The yen is a little weaker at 118.36 to the U.S. dollar but is expected to gain if the United States does go to war. Property stocks lift Hang Seng
Hong Kong's Hang Seng index is flat, up 0.01 percent at 9,299.39. Bank stock HSBC is continuing its march south, Hong Kong's largest listing down 0.60 percent to HK$83.00. Rival bank Standard Chartered is down 0.59 percent to HK$83.75, with both banks globally exposed to any economic weakness. PCCW is steady at HK$6.30 after the company completed its first unsecured bond offering, a $456 million bond deal that will help it lower its debt level. There are gains for property stocks such as Cheung Kong Holdings, up 0.50 percent to HK$50.50, and Henderson Land, ahead 0.89 percent to HK$22.60. Property developers and other companies with limited international exposure are expected to benefit if the U.S. dollar and pegged Hong Kong dollar continue to weaken. Australia down sharplyAustralia's S&P/ASX 200 index is down 2.33 percent at 2,955.6 in early afternoon, hitting a six-week low. News Corp. is off 5 percent to A$11.30, a two-and-a-half month low. Mining company and oil producer BHP Billiton is also off sharply, down 4.37 percent to A$8.97, with Rio Tinto and WMC Resources also well in the red. Telecom stock Telstra is down 1.08 percent to A$4.56, while banks and airline Qantas are also lower. But grocer Woolworths is up slightly, after reporting strong first-half sales. (Full story) Gold hit a six-month high of $370 an ounce on Monday, a sure sign that investors are feeling risky investments and looking for the safest haven from a possible storm in the Gulf. (Full story) But that is little boost to gold producers in Australia on Tuesday, Lihir Gold trading down 3.18 percent to A$1.52. Steelmakers up in TaiwanAsia is otherwise stable, with small gains in Taiwan and South Korea. Taipei's Taiex is up 0.38 percent to 4,991.59 and Seoul's Kospi is up 0.22 percent to 594.40. A host of smaller tech companies are driving Taiwan stocks higher, with domestic industrials also attracting some buyers. China Steel is up 3.10 percent to T$23.30 and rival Yieh Loong is seeing the heaviest trading by volume, up 6.4 percent to T$16.60. Samsung rebounds in SeoulIn South Korea, Samsung Electronics is rebounding after heavy selling on Monday, up 0.67 percent to 301,000 won. The second-largest listing, SK Telecom, is down 2.22 percent at 176,500 won as the cell-phone company suffers continued fallout from disappointing earnings last week. Singapore's Straits Times is showing the strongest gains in Asia, up 0.66 percent to 1,340.09. The Malaysian market is lower for the third day, the Kuala Lumpur composite off 0.37 percent to 662.19.
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