Asian stocks plunge after fresh yen slide

Asian stocks plunge after fresh yen slide

SINGAPORE (Reuters): A slide in the embattled yen past the
146-per-dollar mark yesterday unleashed ferocious pressures on
regional stock exchanges, with Hong Kong leading the way with a
drop of 6 percent before a slight recovery.

The yen hit 146.10 per dollar in afternoon trade in Tokyo, but
was quoted at 145.89/5.99 at 0817 GMT.

Few bourses escaped the fears about a regional economic
downturn, which gathered momentum after Japan's first quarter
Gross Domestic Product figures on Friday showed the country
officially in recession.

Tokyo's Nikkei 225 closed down 197.16 points -- 1.31 percent
-- at 14,825.17. Hopes that cash-rich pension funds might step
into the market slowed the fall in morning trade, but the bears
took the lead as the day wore on.

"The GDP figures were weak indeed, and I don't think the
Nikkei 225 will head sharply higher any time soon," said Shinichi
Ichikawa, strategist at Credit Lyonnais Securities Co Ltd.

Concern over Japan's first recession in 23 years and the
impact on its neighbors has been exacerbated by the yen's further
decline, brokers said.

Hong Kong was hit hard by a combination of the falling yen, a
rise in local interbank rates and worries about jobless figures.

The unemployment rate jumped to 4.2 percent in the March-to-
May period, the highest level in 15 years.

The Hang Seng fell down more than six percent at one stage
before rebounding slightly. At the close, the Hang Seng was down
452.94 points or 5.72 percent to 7,462.50.

Jitters about the high interest rates combined with the
falling yen to give the Hang Seng a hammering. "The (interbank)
one-month rate rose to about 20 percent and the Japanese yen
continued to fall...Stock markets in the whole region are weak,"
said Percy Au-Young, sales director at DBS Securities.

A 10.66 percent drop in Philippine Long Distance Telephone Co
started a long slide for the Manila market. The heavily-traded
blue chip also saw strong selling in its American Depositary
Receipts in New York on Friday.

"Investors sold down PLDT in New York because of negative
sentiment on Asian companies," a trader at a foreign brokerage
said.

But there was a slight rebound in afternoon trade. At 0813
GMT, Manila's key stock index was down 4.49 percent at 1,746.86
having lost 82.16 points. It fell nearly six percent earlier.

The KLSE was down 4.42 percent at 451.47, a loss of 4.42
percent at 0821 GMT.

In Seoul, where investors are anxiously awaiting a government
list of non-viable companies on Thursday, the Korea Stock
Exchange Composite Index closed at an 11-year low at 288.21, 4.82
percent, 14.60 points, down on the day.

But another recently-beleaguered market, Taiwan, defied the
regional gloom, picked up by a soaring electronics sector led by
microchip giant Taiwan Semiconductor which was up T$4 at T$72.5.
The Taiwan weighted index ended up 2.34 percent, 166.72 points,
at 7,283.83.

Brokers said the markets were reassured by the fact that the
Taiwan dollar had managed to buck the trend and move up against
the U.S. dollar.

"Investors are convinced that the government really will
defend the market," said Allen Hung, vice-president at National
Securities.

"With the government so bullish, some investors are beginning
to think maybe they don't have to be so bearish."

Rises in dual-listed Indonesian stocks failed to buoy the
markets in Jakarta. The JSX index went up in early trade before
falling victim to weakness in the rupiah and the regional
malaise.

Australia's currency woes hit the All Ordinaries, but the
successful float of financial services giant AMP Ltd moderated
the blow.

The All Ordinaries closed off 0.16 percent at 2,567.5, a fall
of 4.2 points.

Bombay was also hit by persistent selling pressure, skidding a
year low in afternoon trading. Brokers blamed the regional crisis
and the deep shadow of international sanctions imposed in the
wake of India's nuclear tests.

The BSE was down 4.16 points at 3,208.13 points at 0811 GMT, a
loss of 139.28 points.