Asian stocks to fall further on S. Korean crisis<\/p>\n
HONG KONG (Reuters): Asian markets are set for further
\ndeclines this week, with investors keeping to the sidelines and
\nfearful of developments in South Korea.<\/p>\n
Reports that South Korea was demanding early release of
\nfinancial assistance negotiated under a record International
\nMonetary Fund package heightened nervousness.<\/p>\n
Markets were also edge about rumors that Indonesian President
\nSoeharto had fallen ill. Jitters prompted a huge slide in the
\nrupiah and reinforced the sense of crisis in Jakarta, and
\nthroughout the entire region.<\/p>\n
But South Korea remained the major focus. The world's 11th
\nlargest economy before its currency tumbled this year, South
\nKorea has a formidable contagion potential that has erased all
\nconfidence in Asia's hopes for an early recovery.<\/p>\n
Drastic declines in the won and last week's contagion through
\nAsia's strongest economies in Hong Kong and Taiwan indicated the
\ndepth of concern in financial markets about South Korea's
\neconomic condition.<\/p>\n
The won was poised for further declines as investors waited
\nfor the outcome of presidential elections on Dec 18.<\/p>\n
Foreign investors were uniformly negative on the outlook for
\nSouth Korean stocks. A relaxation of foreign investment limits on
\nDec. 15 to 50 percent from 25 percent was expected to attract
\nvirtually no foreign interest.<\/p>\n
In Seoul, stocks are expected to widely fluctuate this week
\nwith a freefall of the local currency against the U.S. dollar,
\nbrokers said.<\/p>\n
They also said the market would remain cautious ahead of
\npresidential elections on Dec 18, when the public will choose one
\ncandidate who will inherit the economic crisis.<\/p>\n
On Saturday, the composite index closed at 359.82, down 75.91
\npoints or 17.42 percent from last Saturday's 435.73.<\/p>\n
In Tokyo, the Tokyo market would focus on the release of a
\nmuch debated package by the ruling Liberal Democratic Party (LDP)
\nmeant to help revive Japan's troubled economy.<\/p>\n
\"If the package disappoints the market, the Nikkei 225 could
\ntest its bottom levels early next year,\" said Hiroshi Arano,
\ngeneral manager of investment planning at Dai-Ichi Kangyo Asset
\nManagement Co Ltd.<\/p>\n
On Friday, the 225-share Nikkei average extended its losing
\nrun to a third consecutive day, closing down 145.85 points or
\n0.91 percent at 15,904.30 -- its first close below the key 16,000
\nlevel since November 25.<\/p>\n
In Hong Kong, stocks were expected to trade within a range on
\nsubdued volume this week but lingering regional currency woes and
\nfear of further attacks on the Hong Kong dollar would add
\nvolatility to the market, analysts said.<\/p>\n
\"The market is directionless and I believe the Hang Seng Index
\nwill move between 10,000 and 11,000 points in the short term,\"
\nsaid Patrick Chia at China Everbright Research.<\/p>\n
In Taipei, Taiwan's stock market was expected to remain
\nvolatile as South Korea continued to struggle with worsening
\nfinancial turmoil and Asia's ongoing crisis, brokers said.<\/p>\n
Brokers nevertheless said there would be a chance the index
\ncould test the 8,800-point level if investors could shake off the
\nworst of the Asian crisis jitters.<\/p>\n
On Saturday, the index ended down 54.39 points or 0.65 percent
\nto 8,343.88 from last Saturday's 8,243.76 close.<\/p>\n
In Singapore, share prices were seen under pressure this week,
\nhit by fallout from the region's woes and a bearish earnings view
\nfor companies in its key electronics sector.<\/p>\n
\"There will be a short round of selling across the market. Low
\nvolumes could give us some sharp price moves, but fund managers
\nare going to have to hang on to what they've got to the end of
\nthe year now,\" said a dealer at a European institution.<\/p>\n
The Straits Times Industrials Index closed down 31.30 at
\n1,632.98 on Friday. The index lost 80.79 points or some 4.7
\npercent from the previous week's close of 1,713.77.<\/p>\n
In Bangkok, stocks were falling in the early part of last week
\nas concerns about the region's economic outlook continued to
\ndepress the baht and local shares, brokers said.<\/p>\n
Hopes of a technical rebound toward the latter half this week
\nhelped pare losses on Friday and should limit falls in a market
\nclose to nine-year lows, brokers said.<\/p>\n
\"I think some people are expecting some support this week and
\nare hoping to gain from both a stronger currency and a rising
\nshare prices,\" said a broker.<\/p>\n
The SET Index fell 3.12 points, or 0.84 percent, to 368.39 on
\nFriday and its lowest close since December 22, 1988.<\/p>\n
In Manila, Philippine shares were likely to remain wobbly next
\nweek as ripples from weakening regional currencies kept investors
\non the defensive, brokers said.<\/p>\n
\"Why should it go up? People are still wary on what will
\nhappen next,\" said Gina Tan at Angping Securities.<\/p>\n
She said local shares, which were on an eight-day rising
\nstreak before the peso tumbled by midweek, have been standing on
\nshaky ground due to the poor corporate outlook next year.<\/p>\n
In Kuala Lumpur, battered stock and currency markets around
\nthe region would remain the main focus of investors in Malaysia
\nthis week, dealers said.<\/p>\n
\"Next week, a lot depends on what happens in Hong Kong. The
\nmarket is still governed by regional concerns,\" said Victor Wan,
\nsenior analyst at South Johor Securities.<\/p>\n
The Kuala Lumpur Stock Exchange (KLSE) Composite Index of 100
\nlarge-capitalized stocks closed 32.48 points, or 5.35 percent
\nlower from Friday a week ago. On Friday, the index closed at
\n574.92, down 14.26 points from Thursday's close.<\/p>\n
In Sydney, Australia's stock market looked set to adopt a
\nsofter near term as Asian worries preoccupied traders, although
\nthe market was slipping into a pre-Christmas lethargy.<\/p>\n
The All Ordinaries index lost 0.9 percent to 2,494.0 on Friday
\nand was down 2.5 percent on the week.<\/p>\n
In Wellington, New Zealand shares were vulnerable to further
\nAsian fragility after it took a heavy pounding from the fallout
\nof South Korean problems in the latter half of the week.<\/p>\n
The market's bluechip NZSE-40 index ended the week 2.7 percent
\nlower at 2330.92 from its 2,394.29 close last week, after losing
\n1.5 percent on Friday and 1.25 percent on Thursday.<\/p>",
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