Fri, Jan 07, 2000 - Page 1 News List

TAIEX keeps head above water as region drowns

MARKETS High-tech and telecoms stocks across Asia took another dive as Wall Street's losses mounted

AGENCIES

For a second day, the Taiwan stock market proved a lone regional standout, rising while the rest of Asia was tumbling.

Again, computer and telecommunications companies led the region downward as sharp losses on Wall Street prompted investors to question how much they're paying for last year's star performers.

The TAIEX, however, managed to keep its position, rising 0.8 percent to close at 8,922.03.

Declines by Sony Corp and Fujitsu Ltd helped push Japan's broad Topix index down 42.25, or 2.6 percent, to 1609.59.

Tokyo's Nikkei 225 Index ended down more than 2 percent after the president of Sony Corp said the firm's stock was overvalued and a price above 20,000 yen was "a bubble."

It fell 374.28, or 2 percent, to 18,168.27 at close.

Telecommunications and Internet-related stocks led Hong Kong's Hang Seng Index down 4.4 percent.

The Hang Seng has lost almost 11 percent since Tuesday, but analysts are convinced that the market is experiencing nothing more sinister than a natural correction.

"This is just blowing away some of the froth that was added at the end of last year," John Schofield, regional technical analyst at Prudential-Bache Securities, said.

"I think we'll see the low around 15,000 ... We're only a year into this Asian recovery and it's much too early to call time on it," he added.

The Korea Stock Price Index finished down 2.6 percent and Singapore's Straits Times Index down 1.3 percent.

The US NASDAQ Composite Index, half of which is made up of computer-related companies, continued its Icarus-like descent, falling by as much as 1.88 percent in early trade yesterday, as investors sold off high-tech for a third day.

In Europe, the ongoing slide in techs, telecoms and media out-weighed a pickup in cyclicals such as basic producers. London's FTSE 100 and Frankfurt's DAX both headed downward in early trade.

"Today's decline is merely a correction of last year's rally,'' said Norio Suzuki, investment manager at Indocam Japan Ltd, which manages 940 billion yen (US$8 billion).

"The market may remain sluggish for a month or so, yet this doesn't suggest the end of the bull market," Suzuki said.

Taiwan's TWSE Index, meanwhile, rose 0.8 percent yesterday, climbing for a ninth session.

The gain was paced by banks and insurers such as Cathay Life Insurance Corp, following a report that the government will allow them to invest in other related financial services such as securities houses.

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