Selling pressure pulls down Asian stocks

Selling pressure pulls down Asian stocks

SINGAPORE (AFP): Asian stock markets were hit by selling
pressure yesterday amid concerns over renewed weakness in
regional currencies and Indonesia's plans to institute a pegged
exchange-rate.

The Indonesian stock market dipped 9.2 percent to end up as
the biggest loser of the day even as the rupiah currency
strengthened against the dollar, awaiting moves towards the
promised "currency board" system.

Under a currency board system, used most notably in Hong Kong,
each local currency note is backed by its equivalent in foreign
reserves at a pre-set rate to ensure stability, and interest
rates are used to fine-tune the system.

Other regional currencies weakened on a perception that the
dollar had been oversold in recent days, prompting investors to
lock in profits on recent stock price gains.

Singapore's benchmark stock index closed 1.3 percent lower.

"The market rally has lost its steam," a dealer with a
Japanese brokerage said. "Markets initially cheered news about
the Indonesian currency board, now everybody is very concerned
what its true impact will be."

The blue-chip Straits Times Industrials index closed 20.96
points lower at 1,600.29 while the more broadly-based All-
Singapore index was 7.52 points lower at 413.22.

In Tokyo, Japanese share prices closed 0.2 percent lower,
pressured by profit taking and futures-led selling amid a lack of
fresh leads, brokers said.

"Institutional investors are reluctant to turn active buyers
of cyclicals ahead of the end-March book closing," said a broker
at a foreign brokerage.

The key Nikkei stock average on the Tokyo Stock Exchange
closed down 30.16 points at 17,174.93, while the broader Topix
index of all first section issues edged down 1.60 points to
1,298.70.

In Hong Kong, share prices fell 1.6 percent here, the third
straight day of decline, on continued profit-taking despite
overnight gains on Wall Street, dealers said.

"The market is dragged down by profit-taking. I think we are
still for some correction," after the index reached this year's
high of 10,873.15 on Monday, said Sean Li, associate director at
Amsteel Securities.

The key Hang Seng index lost 173.38 points to close at
10,620.03.

In Kuala Lumpur, Malaysia's key stock index closed 5.7 percent
lower due to the weak ringgit and profit-taking by institutional
investors.

"The weak ringgit drove investors into a selling mood. At the
same time, there were those who took profit following the recent
sharp gains on the bourse," an institutional dealer with a local
brokerage said.

The Kuala Lumpur Stock Exchange's 100-share weighted composite
index fell 42.44 points to finish at 697.43, while the second
board lost 23.09 points, or 10. 66 percent, to 193.34.

In Sydney, the Australian Stock Exchange's main indicator, the
All Ordinaries index, fell 3.7 points to 2,674.3.

In Bangkok, the slight weakening of the Thai baht coupled with
profit taking across the board sent Thai share prices 2.9 percent
lower, dealers said.

The Stock Exchange of Thailand (SET) broad based index plunged
15.19 points to finish at 509.33, while the SET 50 lost 1.35
points to close at 38. 90 points.

In Manila, Philippine share prices declined 2.3 percent on a
technical correction and a weaker peso currency, a day after the
index rose to a five-month high, brokers said.

The Philippine Stock Exchange composite index fell 51.87
points to 2,166. 45. On Wednesday, the index soared 6.7 percent
as foreign funds returned amid an improving outlook for crisis-
ridden Asia.

In Seoul, share prices closed 1.5 percent down on the Korea
Stock Exchange on concerns about labor strife and commercial
papers maturing in March, dealers said.

The composite index closed down 7.65 points at 512.49, off a
low of 497.27.

In Taipei, the Taiwan Stock Exchange weighted price index
moved up 86.60 points to 8, 800.02.

In Shanghai, the Shanghai Stock Exchange's B share index rose
1.20 point to close at 55. 39 points while the A share index of
locally-traded stocks fell 4.8 points, or 0.4 percent, to
1,314.96 points.

In Auckland, the NZSE-40 eded up 28.94 points to 2,312.88 on
turnover of NZ$79.8 (US$47 million).