Asian stocks mostly lower on Wall Street jitters

Agencies, Jakarta

Asian stock markets were lower Wednesday on investor caution after another jittery day on Wall Street.

Share prices in Hong Kong, Sydney and Taipei lost about one percent but Japan gained 0.4 percent on bargain-hunting, reversing earlier losses after falls on Wall Street and a stronger yen, dealers said. Seoul was closed for a public holiday.

On Tuesday, New York stocks were hit hard by a late selloff, as the Dow industrials tumbled 1.9 percent to 8,472.70 and the Nasdaq fell 0.6 percent to 1,374.75 in continuing turmoil over corporate scandals.

But European bourses closed higher amid hopes that battered U.S. share markets would stage a defiant rally on Wednesday.

Indeed, U.S. stocks held hefty gains in early morning trade on Wednesday as quarterly earnings reports from bellwethers like Intel Corp. emboldened investors to jump back into the market after a rash of selloffs.

"We had some good earnings and the market became deeply oversold -- all this triggered the rally," said Stanley Nabi, managing director at Credit Suisse Asset Management, which manages about US$260 billion globally. "This rally was bound to happen. We have to find out how sustainable it is now."

Intel, the world's No. 1 maker of computer chips, posted quarterly revenue and earnings at the low end of expectations, but earnings still more than doubled from the year-ago quarter and it forecast flat to higher revenue in the third quarter.

In Tokyo, the Nikkei 225 index closed up 45.6 points Wednesday at 10,296.02, off a low of 10,113.61. The Topix index of all first section issues finished up 3.57 points at 988.10.

"After Sony fell significantly, investors dumped hi-tech shares but then bargain hunters returned to the market in mid- afternoon to push up the Nikkei index," said Hiroichi Nishi, market analyst at Nikko Cordial Securities.

Sony fell 240 yen, or 4.14 percent to 5,560 yen and Matsushita Electric Industrial shed five to 1,562.

"The index was still top heavy, with many exporter shares losing on the recent appreciation of the yen," Nishi added.

"If the yen continues to surge higher, it could become a significant problem for exporters. But if it stabilizes around 115 yen level, I think it might not hurt them that much," he said.

Many Japanese firms have made their year to March 2003 earnings forecasts on the assumption the dollar-yen rate will be at about 120-130 yen.

In Jakarta, shares closed 0.5 percent lower on profit-taking in blue chips, notably Telkom and Gudang Garam, but dealers said gains in Astra capped the index's fall.

The Jakarta Stock Exchange composite index ended down 2.390 points at 479.377.

Dealers said sentiment remained weak, undermined by regional markets after another volatile session on Wall Street.

European shares extended their gains to three percent or more on Wednesday afternoon as technology and telecom stocks surged, led by Alcatel and Deutsche Telekom, both up by ten percent.

Financials, banks, oils and insurers were also strong as investors looked to firm opening gains on Wall Street.

Sentiment was bolstered by hopes the worst is over for Deutsche Telekom as the board, with a new interim CEO, promises to cut costs.

U.S. stock index futures were up more than two percent as Wall Street was poised to bounce back from Tuesday's losses after seven down sessions in a row for the Dow Jones industrial average.

Europe's telecom equipment makers like Alcatel, Ericsson and Nokia were also strong as U.S. peer Motorola posted strong earnings.

Motorola also said its semiconductor unit would break even in the third quarter, but added it expected the global wireless network equipment industry market to fall 18 percent this year.

Nokia and Ericsson report on Thursday and Friday, respectively. Nokia's stock was up 6.8 percent, with Ericsson seven percent ahead.

The Euro Stoxx 50 index of euro zone blue chips gained 3.9 percent.