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Asian stocks mixed; Seoul and Sydney break records

"The Taiwan dollar tumbled despite the central bank's rate hike, triggering fears of foreign capital outflows."

Samson Chueh, assistant vice president at Fuhwa Securities

AFP, Hong Kong

Asian stocks closed mixed Friday after a lackluster showing on Wall Street but this was no deterrent to Seoul, Sydney, Wellington and Mumbai who all continued record-breaking performance in defiance of concerns over oil or rising interest rates, dealers said.

At the same time, losses elsewhere were modest and sentiment overall remained positive, with strong Chinese economic data underpinning hopes the region can continue to prosper.

Dealers said investors appear to have got used to the prospect of higher oil prices and interest rates, and to have the capacity to absorb what would normally appear to be hugely dramatic events such as Hurricane Katrina.

They said that if the markets can cope with this kind of setback it is hard to immediately see what could really call into question the current confident tone.

On the day, Seoul rose 0.39 percent, Sydney 0.88 percent, Wellington 0.56 percent and Mumbai added 1.17 percent.

Taiwan loses ground

Taiwan share prices closed 0.84 percent lower as further weakness in the NT dollar and fears of margin calls weighed down the market further, dealers said Friday.

A lackluster Wall Street overnight and the Taiwan central bank's in-line decision to hike interest rates by 12.5 basis points provided no support, with a weakening currency suggesting foreign investors may be taking their money out of the country, a major negative lead for their local counterparts.

The weighted index closed down 51.32 points at 6,031.24, off a high of 6,086.88 and a low of 6,015.56, on turnover of NT$60.61 billion (US$1.85 billion). Decliners led gainers 691 to 203, with 165 stocks unchanged.

"The Taiwan dollar tumbled despite the central bank's rate hike, triggering fears of foreign capital outflows," said Samson Chueh, assistant vice president at Fuhwa Securities.

Central bank governor Perng Fai-nan Thursday blamed an outflow of "hot money" for the recent weakness in the local currency.

Dealers said such worries over foreign capital flows and the bourse's recent sluggishness also raised fears of margin calls, whereby investors have to cover positions established on borrowed funds.

Taiwan Semiconductor Manufacturing Co fell NT$1.30 to NT$52.60 and United Microelectronic Corp was steady at NT$20.50.

Japan mixed

Japanese share prices closed mixed, with the headline blue-chip index ending 0.22 percent lower, weighed down by profit taking after recent strong gains, dealers said.

The Tokyo Stock Exchange's benchmark Nikkei-225 index fell 28.10 points to 12,958.68. However, the broader TOPIX index of all first-section shares gained 1.55 points or 0.12 percent to 1,328.84.

Gainers beat losers 817 to 713, with 127 stocks unchanged.

The Nikkei had gained 2.1 percent and the TOPIX jumped up 2.7 percent over the past week following reform-minded Prime Minister Junichiro Koizumi's massive election victory Sunday and amid upbeat signs on the Japanese economy.

"With stock prices almost reaching the 13,000 points level [on the Nikkei index], it is natural to take profits," said Mitsushige Akino, a chief fund manager at Ichiyoshi Investment Management.

He said investors were also not in the mood to push stocks ahead of shortened trading next week, when the market is closed for public holidays both Monday and Friday.

Korea higher

South Korean share prices closed 0.39 percent higher, with the modest gain still enough to see the market chalk up another record finish, dealers said.

They said trade was generally cautious ahead of a long weekend for the three-day Chusok holiday through tomorrow and after Samsung Electronics' profit-warning and downbeat comment on the outlook for its LCD business.

The KOSPI index rose 4.54 points to 1,174.13, off a high of 1,176.06 and a low of 1,164.13. Volume was 376 million shares worth 3.4 trillion won (US$3.4 billion). Gains led falls 498 to 236, with 64 stocks unchanged.

Retail investors were net buyers of shares worth 112.2 billion won while foreign investors and institutions were net sellers of 105.9 billion won and 10.6 billion won, respectively.

Samsung Electronics itself continued to slide, falling more than two percent amid concerns over its profit warning and downbeat comment on the outlook of the Liquid Crystal Display business.

"It seems the warning by Samsung of a possible cut to LCD investment has provided a good excuse for profit taking after the stock rallied to the 610,000 won level," Daishin Securities analyst Na Min-Ho said.

He said broad sentiment still remains firm, as seen in the continued gains to record high levels.

Heavy losses by major IT stocks were offset by solid gains in POSCO, SK Telecom and Kookmin Bank, dealers said.

Samsung Electronics fell 14,000 won to 593,000 and Hynix shed 200 to 23,900.

Hong Kong down

Hong Kong share prices closed down 0.38 percent, led back below the key 15,000 points level by property stocks on worries over an expected US interest rate hike next week, dealers said.

They said investors also took profits ahead of the long weekend as the market will be closed tomorrow for a public holiday.

The Hang Seng index shed 57.82 points at 14,983.20, off a low of 14,965.98 and a high of 15,035.45. Turnover was HK$14.53 billion dollars (US$1.86 billion).

Eva Chu, research head at Kim Eng Securities, said property stocks came under selling pressure on worries over interest rates, with the US Fed expected to lift its key rate next week.

Interest rates in Hong Kong tend to follow those in the US due to the Hong Kong dollar's peg to the US dollar.

"Investors were cautious as it is expected that the US Fed will raise interest rates again by 25 basis points," added Howard Gorges, vice-chairman at South China Securities. He said the market "lacks momentum to move higher."

Chu said some investors also locked in profits in blue chips and H-shares ahead of the long weekend.
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