Investors stand back after steep declines in Asia

Regional markets * Taipei: TAIEX down 0.23 percent or 13.97 points to 6,081.84. * Tokyo: NIKKEI-225 down 131.77 points or 0.99 percent to 13,227.74. * Hong Kong: Hang Seng up 8.49 points to 14,847.79. * Seoul: KOSPI down 0.12 percent or 1.48 points to 1,201.01. Source: AFP

Asian closed narrowly mixed on Friday with anxious investors taking to the sidelines after two days of steep falls, prompted by the prospect of rising US interest rates.

Dealers market players were to look to the US overnight and the release of nonfarm payrolls and unemployment data for last month and weaker than expected figures could trigger another round of heavy selling.

Inflation, historically high oil prices, and economic damage in the wakes of hurricanes Katrina and Rita have now combined to trouble the region's markets with the US Fed warning that further rate hikes might lay ahead.

Tokyo among the worst performers on the day, falling 0.99 percent, while Bangkok, Sydney, Kuala Lumpur and Hong Kong all registered modest losses. The markets in Shanghai were closed.

In Taipei share prices closed 0.23 percent lower, slipping in line with further losses overnight on Wall Street amid continuing concerns over the prospect of higher interest rates.

"Further declines on Wall Street overnight could hardly entice investors to buy shares as they are about to have a three-day holiday," said Oliver Fang, a Yuanta Core Pacific Securities (元大京華證券) assistant vice president.

The smaller turnover than in recent sessions best illustrates the tendency among investors to stay put for now, he said.

"How Wall Street plays out next week, in particular with regard to the expectations of more interest rate hikes to stave off inflation, will certainly determine the chances of a more meaningful rebound for us," he added.

The TAIEX fell 13.97 points to 6,081.84 on turnover of NT$67.51 billion (US$2.03 billion).

Tokyo prices limped to the end of a tough week, with the main NIKKEI index extending losses on worries about the US economic outlook ahead of a key jobs report.

Dealers despite the losses, sparked by several blunt warnings from senior US Federal Reserve officials on the dangers of inflation, the market was not unduly concerned by the pullback given recent gains of some 15 percent in just two months.

The NIKKEI-225 index lost 131.77 points or 0.99 percent to 13,227.74 as 2.6 billion shares changed hands ahead of a three-day holiday weekend.

Seoul prices closed 0.12 percent lower, driven by Wall Street's weaker finish and a heavy sell-off in IT and bank stocks by foreign investors. The KOSPI index closed down 1.48 points at 1,201.01.

"The market is dominated by caution now," said Hanyang Securities analyst Hong Soon-Pyo, adding that he expects the correction to continue well into next week.

Hong Kong share prices closed flat as modest gains posted in the morning session due to bargain-hunting were eroded in late trade as interest rate worries again came to the fore.

Dealers repeated warnings by US Federal Reserve officials this week on rising US inflation and Wall Street's subsequent losses weighed on sentiment, with the mood cautious ahead of the key US employment report later Friday.

The Hang Seng Index closed up 8.49 points at 14,847.79.

Australian prices closed 0.15 percent lower, slipping further even as the selling pressure after a week in which the market suffered its biggest two-day loss since the Sept. 11, 2001 attacks on the US.

Dealers continuing concerns about rising inflation and thus higher interest rates in the US kept the market on the defensive after losses of some 5.0 percent since record highs were struck last week.

The S&P/ASX 200 index lost 6.7 points at 4,440.6.

Dealers while the S&P/ASX 200 was up 29.1 points in early trade, the market failed to sustain the bounce, reflecting nervousness ahead of key US employment figures due later in the day.

Singapore prices closed 0.69 percent higher on expectations preliminary third quarter economic growth figures to be released next week would be strong.

Dealers shares climbed ahead of the Monday release of preliminary data for the third quarter to last month with analysts upbeat on another strong performance following a 5.20 percent expansion in the June quarter.

The Straits Times Index rose 15.77 points to 2,305.24.