Asian markets spooked by U.S. gloom

Japanese chip shares were hammered by a reduced earnings outlook on Intel

HONG KONG, China -- Asian markets ended mostly down on Tuesday, as dismal corporate earnings report and a weaker Nasdaq overnight spooked investors.

In Tokyo, the tech-driven Nikkei average remained in negative territory for the second straight day, shedding 1.42 percent to 13,067.09.

The capital-weighted TOPIX index fell 0.66 percent to 1,285.53.

Japanese stocks fell after investment firm Morgan Stanley cut its earnings outlook for the world's largest semiconductor maker, Intel Corp.

Morgan Stanley also lowered investment ratings on other U.S. chip firms, sending their shares lower in New York.

In Tokyo Advantest, a maker of semiconductor testing devices, dropped 4.17 percent to 12,650 yen, extending Monday's 3.4 percent fall. Major PC and chipmaker Fujitsu Ltd lost 2.71 percent to 1,581 yen and is now 39 percent lower than a year ago.

Nikon Corp, Japan's biggest maker of steppers that etch circuits onto semiconductor chips, gave up 4.37 percent to 1,387 yen, while Kyocera Corp, the world's largest maker of integrated circuit ceramic packages, fell 4.51 percent to 11,230.

Nasdaq bellwether Cisco Systems Inc also fuelled selling in the broader market by saying it expects the economic downturn to cause quarterly revenues to slump by 30 percent.

Nonetheless, traders said the Tokyo market weathered well the bout of sour news from overseas, as investors remain cautiously optimistic for a new prime minister and stock-related tax reform.

Tech, telecom shares hit

In Hong Kong, tech stocks such as China Mobile also ended lower. The Hang Seng Index fell 2.95 percent to finish at 12,606.45.

Cisco shares traded in Hong Kong fell 12.9 percent to HK$135 on a very thin turnover.

But the market focused primarily on banking issues, on expectations there would be more consolidation in the territory's banking sector after DBS announced its takeover of Dao Heng Bank.

Shares of Wing Lung Bank rose 1.47 percent to HK$34.60, while those of Wing Hang Bank were up 1.08 percent at HK$28.

Shares of Dao Heng Bank, however, fell 1.32 percent to HK$56.25. But its parent Guoco Group saw its shares jump 7.77 percent to HK$41.60 on optimism that its earnings would boost after selling Dao Heng.

Shares in Sinopec, China's second largest oil producer, also bucked the market downtrend, rising 5.22 percent to HK$1.21 after it said that its 2000 earnings were four times those in 1999.

Earnings warning

In Sydney, shares sagged to a lower close on Tuesday, breaking a three-day running streak, as investors nervously eyed a stark earnings warning in the U.S.

Australia's benchmark S&P/ASX 200 index finished down 0.55 percent at 3,258.7.

For much of the day, however, two stocks dominated talk: Qantas Airways because of the strife facing its key competitor Ansett, and Brambles Industries because of an imminent merger with British engineer GKN Plc.

Qantas ended up just one cent at A$2.74, while Brambles' shares finished up A$1.11 or 2.3 percent at A$48.80.

Bullish rebound in Seoul

In South Korea, the benchmark stock index closed higher as telecom issues, which have underperformed recently, staged a bullish rebound.

The Korea Composite Stock Price Index ended up 1.11 percent at 513.97, while the over-the-counter Kosdaq moved up 0.35 percent to 68.31.

Top mobile phone carrier SK Telecom gained three percent to 189,000 won, while fixed-line giant Korea Telecom jumped 3.14 percent to 55,900.

Samsung Electronics also edged up 0.76 percent at 198,500, facing resistance at 200,000 won.

In Taiwan, the tech-heavy stock market closed a touch lower as investors held their fire to wait for quarterly earnings reports. The TAIEX closed down 0.01 percent at 5,431.95

Reuters contributed to this report.

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