Asian stocks poised for another poor week

Asian stocks poised for another poor week

HONG KONG (Reuter): Asian stocks are mainly poised for another
poor week, with Hong Kong depending on Wall Street for direction
and sentiment weak in the rest of the region.

"Traders in Hong Kong are driving these markets," one head
trader said. "There's no theme out there...the rallies we saw in
Jakarta and Kuala Lumpur have definitely run out of steam and I
would suspect we'll test lows there again."

U.S. blue chips powered ahead on Friday as inflation fears
ebbed on benign reports of August retail sales and producer
prices. The Dow Jones Industrial Average rose 1.07 percent, or
81.99 points, to 7,742.97.

The Hang Seng index of blue chip stocks is expected to
consolidate with attention focused on the Communist Party
Congress in Beijing, while Tokyo shares seem headed for further
declines.

Sentiment towards Asia remains poor however, following weeks
of financial market turmoil prompted by currency devaluations in
Thailand, the Philippines, Indonesia and Malaysia.

In Tokyo, Japanese stocks are expected to extend losses amid
pessimism over prospects for economic recovery, but steady
bargain-hunting by public funds may help limit further losses,
analysts say.

The benchmark Nikkei 225 average sank below the widely watched
18,000 level on Friday, ending at its lowest level in nearly five
months.

Some analysts said the Nikkei could dip towards 17,000, but
others said consistent bargain-hunting by public funds in Japan
may help cushion a fall.

In Hong Kong, regional currency and stock market instability
is expected to keep investors on the sidelines and Hong Kong
stocks are likely to consolidate, although China plays could move
ahead if China's Communist Party Congress yields encouraging
results.

The Hang Seng Index slipped 93.09 points, or 0.64 percent, in
the past week, having gained 162.16 points, or 1.13 percent, on
Friday to close at 14,470.46 points.

In Taipei, Taiwan's stock market was expected to remain soft,
after the index ended down 61.40 points at 9,093.84 on Saturday,
for a 3.1 percent drop over the week.

Brokers saw a range of 8,800-9,300 in the coming week for the
index, which has lost more than 10 percent from a seven-year high
on Aug. 26.

In Seoul, the market's direction after the Sept. 15-17 autumn
harvest holiday was uncertain brokers said, but some believed
prospects of an announcement raising the foreign ownership limit
on shares could trigger a rise.

Stocks closed mixed on Saturday with core blue chips leading
gainers, while smaller capitalized issues fell on margin loan
calls. The composite index ended at 699.74, up 0.41 points from
Friday. The market reopens Thursday.

In Singapore, foreign fund buying was expected to underpin the
Singapore stock market, dealers said.

On Friday, Rothschild Asset Management (Singapore) named
Singapore as its most favored Asian investment prospect.
Dealers said electronic counters are recommended on optimism of a
recovery in the sector, dealers said.

The Straits Times Industrial Index ended 8.27 points up at
1,935.95 on Friday, compared with 1,884.06 a week earlier.

In Bangkok, Thai stocks are set for another bumpy week with
expectations of higher interest rates at some banks set to
aggravate tight liquidity, and political uncertainties adding
pressure, brokers said. Four major banks raised lending rates in
the past week.

The Stock Exchange of Thailand (SET) index fell 1.1 percent in
the past week to 534.18 points.

Brokers said a no-confidence motion against Prime Minister
Chavalit Yongchaiyudh, expected on September 24-25, and a final
vote on a new constitution to be held on September 27 would keep
investors sidelined.

In Kuala Lumpur, Malaysian shares are expected to trade in a
range in the coming week, brokers said.

The Kuala Lumpur Stock Exchange (KLSE) benchmark Composite
Index ended 2.15 percent, or 17.91 points, higher on Friday at
852.08 -- 3.7 percent higher than a week earlier.

Brokers see immediate support at 800 and resistance at 855.

In Manila, volatile trade is expected in the Philippines with
political concerns dictating the tempo, brokers said.

"Politics, that's the trump card these days," said Saturnino
Mejia, research head at Guoco Securities.

President Fidel Ramos is limited by the constitution to a
single six-year term, but Ramos supporters have been pushing for
a change in the charter to allow him to run for a second term.

On Friday, the main index closed 3.61 points lower at 2,141.68
but over the week it gained 32.46 points, or 1.53 percent.

In Sydney, Australian shares are expected to show downward
bias near term as the market contemplates a plethora of mainly
bearish influences from offshore.

The All Ordinaries index closed on Friday at 2,640.0, down one
percent on the day but up half a percent on the week.