Sun, Jul 06, 2003 - Page 10 News List

South Korea avoids Asian slide

BLAME AMERICA Once again, pessimistic reports emanating from the US dampened optimism throughout the Pacific-Rim, with Japan's Canon Inc leading the week's losers


Japanese stocks fell, with benchmarks retreating from 10-month highs. Canon Inc led declines by exporters after a US jobless report tempered optimism consumer demand will help fuel a rebound in the world's largest economy.

"We are not expecting a strong recovery in the US," said Koichi Ogawa, who helps manage the equivalent of US$8.5 billion in Japanese equities as chief portfolio manager at Daiwa SB Investments Ltd. "The stock market has already discounted much of the improvement."

The Nikkei 225 Stock Average shed 0.8 percent to 9547.73 at the 3pm close in Tokyo, ending a three-day, 6 percent rally.

The Topix index lost 0.4 percent to 948.67. Computer-related stocks contributed to 38 percent of the index's slide today. The stocks had rallied 16 percent as a group in the past month.

Elsewhere in Asia, Australia's S&P/ASX 200 Index lost 0.5 percent, led by News Corp, which makes three-quarters of its sales in the US. The rise in the US unemployment rate to more than a nine-year high raised concern that consumer spending may not pick up soon.

South Korea's Kospi index added 0.9 percent, and completed its sixth weekly advance in seven. Hyundai Motor Co led gains by other carmakers after the government said it will revise its sales tax on cars earlier than planned.

Taiwan's TWSE Index had its biggest weekly gain in eight months. Computer-related shares such as AU Optronics Corp and Quanta Computer Inc rose as some investors bet demand for computer parts will improve as people replace obsolete computers.

Stock indexes in Thailand and India rose, while those in Hong Kong, Singapore and Malaysia swung between gains and losses.

China's benchmarks were little changed.


Japan's Topix gained had its seventh straight week of gains, rising 5.1 percent. The winning streak is the longest since the seven-week rally in July 1999. The Nikkei rose 4.9 percent, its biggest weekly gain since November.

Today, Canon slid 1.7 percent to ?5,880. The maker of Eos cameras gets 70 percent of its revenue from overseas. Toyota Motor Corp shed 0.6 percent to ?3,240. The world's third-largest automaker gets about 80 percent of its operating profit from North America.

The US unemployment rate jumped to 6.4 percent last month, the highest since April 1994, from 6.1 percent the previous month.

Declines by exporters were limited as a separate report showed US service industries, the largest part of the economy, expanded last month for a third straight month as new orders rose to the highest in more than 2 1/2 years.

"The jobless report was a dampener and it's probably toned down expectations of a quick US recovery," said Wee Ban Yew, who helps manage the equivalent of US$2.1 billion as a fund manager at OCBC Asset Management Ltd in Singapore.

Kyocera Corp, the world's largest maker of ceramic packaging used to protect finished microchips, fell 5.3 percent to ?7,230. The company, which gets more than half of its sales overseas, said it may have to record "substantial" inventory writedowns this fiscal year.

Nikkei futures for September delivery rose 0.4 percent to 9600 in Osaka and added 0.2 percent to 9585 in Singapore.

The S&P/ASX 200 slid 16.40 to 3028.40, dropping for a second week. The September futures contract declined 0.7 percent to 3024.

"We need to see growing employment and if we don't get that, it could slow the rate of growth" in the US economy, said Paul Xiradis, who helps manage the equivalent of US$682 million at Ausbil Dexia Ltd in Sydney.

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