Asia Stocks Dip on Recession Fear; Tokyo Plunges By Madhav Reddy

SINGAPORE (Reuters) - Tokyo stocks ended at a new 17-year low on Monday, leading a fall across Asia's major markets on sustained fears of a recession and a fresh wave of corporate profit warnings. The region ignored Wall Street's gains ahead of the weekend as local economic data and lowering of forecasts by Japanese companies reinforced market views of tougher times ahead.

Tokyo stocks slid nearly three percent after electronics maker Hitachi Ltd stunned the market with a hefty loss warning late last week, igniting fears of more profit revisions.

``A sense of capitulation is eating its way through the market. First Hitachi, then Nikon -- there's really no sense of when the bleeding will cease,'' said Haruki Takahashi, head of equities dealing at Tsubasa Securities.

Hitachi Ltd ended down by its daily limit of 100 yen or 10.27 percent at 874, its lowest point since May 1999, extending Friday's 4.32 percent slide.

Nikon sharply lowered its 2001 profit forecast on Monday. Its share fell 13.8 percent to 915 yen.

The benchmark Nikkei average dived 2.84 percent or 303.83 points to end at 10,409.68, its fifth straight day in negative turf and its lowest finish since August 1984.

The yen was steady against the dollar as further threats of yen-selling intervention were countered by repatriation flows from Japanese investors ahead of end-September bookclosing.

The dollar was trading at 118.75 yen in early European trade, little changed on the day but within half a percent of three-month lows set on Friday. The yen continued its ascent against the euro, appreciating beyond 107.85.

HK FEARS RECESSION, HYNIX HITS SEOUL

Hong Kong's key share index ended below the key psychological level of 11,000 for the first time since March 1999, on worries that the economy may be slipping into a recession dragging down several large property stocks and some banks.

The benchmark Hang Seng Index ended down 1.69 percent at 10,902.64. It remains one of the worst performing major markets in the world in 2001 so far.

South Korean shares ended slightly lower as Hynix Semiconductor retreated on protracted talks by creditors to bail out the cash-strapped chipmaker.

Hynix, the most active stock with more than 200 million shares traded, ended down 3.6 percent at 800 won ($0.626), giving way to late-session selling ahead of a creditors' meeting set for 0700 GMT to discuss a five-trillion-won lifeline to the troubled chipmaker.

Late on Monday Hynix's adviser Salomon Smith Barney proposed arranging 500 billion won in fresh funds for the company.

The benchmark Korea Composite Stock Price Index (KOSPI) finished down 0.60 percent at 541.83.

A collapse in the value of shares in Australia's largest bank, National Australia Bank (NAB), masked an otherwise strong day on the Australian stock market.

NAB shocked investors when it announced it would take a US$1.75-billion (A$3.05-billion) write-off for its U.S. unit HomeSide Lending, following a US$450-million write-down in July. Investors sliced A$4.30 or 13 percent off NAB shares to A$28.90, their lowest since 18 April.

The benchmark S&P/ASX 200 index closed just 3.3 points lower at 3,272.3, saved from a much sharper fall by a five percent rally in media giant News Corp to A$15.94.

Australia's stock market leader was itself boosted by a four percent spurt on Friday in its film and television unit Fox Entertainment.

Taiwan stocks closed weaker as sentiment turned cautious ahead of the release of August corporate sales figures, dousing any positive reaction from a bounce in U.S. stocks.

The main TAIEX ended down 1.21 percent at 4,454.77, following its 4.62 percent gain last week.

Singapore shares ended lower with technology shares leading the falls and market watchers expect the downtrend to continue amid a lack of encouraging news.

Initial gains over Wall Street's mild rise ahead of the weekend soon ran out of puff as the Nikkei average dived 2.84 percent to end at its lowest finish since August 1984.

In the broader market, the benchmark Straits Times Index slipped 0.22 percent to end at 1,615.51, against a high of 1,625.96 points.

With Japan economically impotent, I guess its up to the American consumer to keep the global economy humming. NOT!!! A lot of American consumers are still paying off last years natural gas bill.

-- Guy Daley (guydaley1@netzero.net), September 03, 2001

Answers

On a holiday when U.S. markets are closed it's nice to get a tip off on how world markets are doing.

Thanks, Guy.

-- Loner (loner@bigfoot.com), September 03, 2001.