Asian stocks slide on Dow, regional woes

Asian stocks slide on Dow, regional woes

SINGAPORE (Reuter): Asian stocks closed sharply lower yesterday after being battered throughout the day in reaction to Wall Street's slide and a myriad of regional factors that continued to sour sentiment.

Malaysian stocks were among the hardest hit, losing over four percent at one point, as government measures to cut the current account deficit failed to prompt fresh buying.

A 1.69 percent drop in the Dow Jones Industrial Average was the catalyst for the selloff in Asia.

It shed 132.63 points to finish at 7,719.28 after leading broker Goldman Sachs and Co said it was "increasingly concerned" about the outlook for the U.S. dollar and forecast weaker than expected third quarter earnings for major blue-chip International Business Machines Corp.

High-tech and electronics stocks were hit in Tokyo and Taiwan when trading resumed in Asia on Thursday, dragging those markets sharply lower.

The key Nikkei 225-share index finished 422.54 points, or 2.26 percent, lower at 18,282.23.

"Buying momentum subsided following Wall Street's decline and players tested the downside," said a broker at a second-tier Japanese securities house.

Taiwan's stock index fell to a low of 9,027.88 before closing off 30.08 points, or 0.33 percent, at 9,115.10.

Hong Kong's Hang Seng Index also took a beating as a result of the fall in the Dow and general weakness in the region. The index ended down 497.14 points, or 3.36 percent, at 14,308.30.

Malaysian stocks fell 4.4 percent at one point on heavy profit-taking and weakness in the ringgit.

Analysts said sentiment remained weak. Although investors were encouraged by news of the government's efforts to cut the current account deficit, they viewed the proposals as an anti-climax.

The composite index closed down 28.91 points, or 3.37 percent, at 834.17.

Philippine stocks were hurt by Wall Street's drop and local political concerns, which centred on whether President Ramos would try to seek a second term.

The index ended off 67.48 points, or 3.05 percent, at 2,145.29.

Stocks in Indonesia and Singapore felt the shakeout in the region. At the close, Jakarta stocks were 18.88 points, or 3.28 percent, lower at 556.14, while Singapore's Straits Times Index finished off the day's lows at 1,927.68, down 16.95 points, or 0.87 percent.

A technical rebound pulled Thai stocks off their early lows, leaving the index up 10.54 points, or 1.95 percent, at 552.09.

Worries about the outlook for Kia Group dragged stocks in Seoul lower. The index closed off 3.75 points, or 0.54 percent, at 695.37.

Talk that local interest rates could be cut pulled Australian stocks off Dow-inspired lows, leaving the All Ordinaries Index down 0.7 points at 2,665.8 at the close. Shares in New Zealand also recovered from early losses and the main index closed 2.54 points higher at 2,487.66.

In London, stocks suffered a marked setback in the first half of the Thursday session, due mainly to a weak Wall Street, while the Bank of England's decision to maintain steady rates - which had been generally anticipated - had no effect on shares, traders said.

The Footsie index was off by 30.8 points or 0.78 percent to stand at 3,874. 4 points as trading continued. But gilts were generally higher.

In Frankfurt, the DAX index plummeted by 1.92 percent on the day to end at 3,972.55 points.

The dollar fell below the 1.8-mark level as it was fixed in Frankfurt at 1. 7959 marks agianst 1.8082 at the Wednesday fixing.