Profit-taking hits stock markets

Profit-taking hits stock markets

HONG KONG (AFP): Investors were quick to lock in profits
yesterday on two days of handsome gains, cutting short a rally on
Asia-Pacific stock markets.

The profit-taking overshadowed optimism sparked by a new
agreement between Indonesia and the International Monetary Fund
spelling out tough new reform measures to pull the country's
economy back from the brink.

The markets were waiting for Indonesia to follow up on the
agreement with concrete action, analysts said.

Stocks in Hong Kong shed 7.0 percent, Jakarta 3.4 percent,
Singapore 0.8 percent, Sydney 0.8 percent, Kuala Lumpur 2.1
percent, Bangkok 1.0 percent, Taiwan 0.4 percent, Shanghai 6.0
percent and Auckland 1.0 percent.

The exceptions were Seoul, up a strong 6.5 percent, and Manila
which ended 1.2 percent higher.

The Tokyo market was closed for a holiday.

In Hong Kong, worries over domestic corporate earnings amid
higher interest rates hit stock market sentiment and sparked
jitters elsewhere in Asia, notably Singapore and Sydney.

The key Hang Seng index lost 647.57 points to close at
8,578.98, after two consecutive sessions of gains. The market had
gained 7.4 percent Tuesday and 5.8 percent Wednesday.

In Singapore, share prices closed 0.8 percent lower, off their
highs, as positive sentiment in the region following a new deal
between the IMF and Indonesia were overshadowed by profit-taking.

"Sharper losses in Hong Kong in the afternoon and a renewed
weakness of regional currencies after Indonesia submitted a
revised economic program to the IMF dragged the market lower," a
dealer with a local brokerage said.

The key Straits Times Industrials index ended 9.91 points down
at 1,233.36 in volatile trade, sliding from the 3.0 percent rise
it registered earlier. The broader All-Singapore index was up
slightly by 0.2 points to end at 366. 58.

In Sydney, Australian shares fell 0.8 percent as investors
cast a wary eye on a plunging Hong Kong bourse and cashed in
profits from strong gains the previous day.

The Australian Stock Exchange's key All Ordinaries index fell
20.8 points to 2,584.5, with another big fall in Hong Kong and
weakening gold affected sentiment during the day.

In Kuala Lumpur, Malaysia's key stock index ended 2.1 percent
lower as short-term investors locked in profits amid weaker
regional bourses.

The Kuala Lumpur Stock Exchange composite index fell 11.21
points to end at 525.47 after rising 12 percent the previous two
days. The index hit a high of 549.74 points and a low of 520.61.

In Bangkok, Thai shares slid 1.0 percent as foreign investors
locked in profits, selling their finance sector stocks after two
days of sharp market gains.

"After a strong start this morning with buying mainly in
communications and energy stocks, the market dropped in the
afternoon mainly on profit-taking by foreigners," an analyst from
Seamico Securities said.

The Stock Exchange of Thailand (SET) broad based index fell
3.56 points to close the day at 364.13, off a high of 377.75. The
SET 50 index was down 0.34 points at 26.22.

In Manila, Philippine share prices rose 1.2 percent due to the
continued strength of the local currency, analysts said.

"It is still the forex market that is driving the sentiment of
the stock market," said Julie Villena of Magnum International
Securities Inc.

However, she said that the market would probably see "cautious
trading" after the index crosses the 1,750-level.
The Philippine Stock Exchange composite index rose 20.63 points
to close at 1,706.85 points.

In Seoul, share prices shot up 6.5 percent on the Korea Stock
Exchange on aggressive buying by foreign investors and the
relative stability of the won, dealers said.

Foreign investors were "unimaginably bullish," spreading their
interest to banks and underpriced large-caps, while continuing to
buy their favorite core blue chips, LG Securities dealer Yoon
Sam-oui said.

"Since the won started recovering from the 1,800 level against
the U.S. dollar, foreign fund inflows have been escalating (to
make foreign exchange profits) and were boosted by the release of
the current-account surplus for December," Yoon said.

The composite index closed up 30.85 points at 505.98, off a
high of 506.52.

In Taipei, Taiwanese stocks led by financial issues dropped
0.4 percent as investors locked in profits after two days of
sharp gains, dealers said.

"It's natural. Big players wanted to lock in profits after the
market rallied 5.7 percent in the past couple of days," said
Clement Lu of Taiwan International Securities Corp.

The Taiwan Stock Exchange weighted price index moved down
27.48 points to 7,770.77.

In Shanghai, the B shares, nominally reserved for foreign
investors, dropped 6.0 percent with investors lacking the
confidence to cross the index's upper resistance level, dealers
said.

"There was a correction after rising for two days, mainly
because the investors weren't optimistic about the future.
Another reason was that the level of 47 points ... had formed a
strong upper resistance," a Nikko Securities dealer said.

The Shanghai Stock Exchange's B share index lost 2.71 points
to close at 42.76 points while the A share index of locally-
traded stocks rose 15.52 points, or 1.2 percent, to 1,287.71
points.

In Auckland, New Zealand shares closed down 1.0 percent on the
absence of buying interest, dealers said.

The NZSE-40 index fell 21.82 points to 2,214.58 on a turnover
of NZ$53.94 million (US$30 million).