U.S. tech falls drag down Asian markets

Japanese tech stocks tumbled on weakness in the U.S. markets

TOKYO, Japan -- Tokyo stocks were lower by midday Thursday after a four percent slide in the U.S. Nasdaq had investors punishing a broad range of technology shares.

These included PC and chipmaker NEC Corp, which was down 3.46 percent at 1,955.

This helped push the benchmark Nikkei average 2 percent or 236.88 points lower to 13,256.47. The broader TOPIX index lost 1.5 percent or 19.39 points to 1,310.34.

Markets in Korea, Australia, Hong Kong and Taiwan also opened weaker Thursday.

VIDEO CNN's Dalton Tanonaka with the Asian stock market update Play video (QuickTime, Real or Windows Media)

Australian shares sagged, with heavyweight News Corp dragging the market down as it faced a raft of negative news, including One.Tel Ltd's demise. Bank stocks were one of the few bright spots. At noon, the benchmark S&P/ASX200 was down 20 points at 3381.5.

In Korea, the Kospi was off 13.28 to 615.14, led by weakness in tech giants Samsung Electronics and Hynix Semiconductor.

Hong Kong stocks fell two percent in morning trade, dragged down by China Mobile and Legend Holdings, the two largest blue chip technology stocks.

The benchmark Hang Seng Index was down more than 2 percent to 13,1146.45 shortly after noon.

In the U.S., the tech-laden Nasdaq composite index posted its third straight losing session on Wednesday, falling 91.04 points or 4.18 percent to 2,084.50 after network computer supplier Sun Microsystems Inc and telecom gear maker Alcatel slashed their earnings forecasts.

Sun outlook making investors wary

"The Sun Microsystems outlook will have investors quite wary of touching the tech sector and should keep the market on its corrective trend," said Tsuyoshi Segawa, equity strategist at Shinko Securities.

The U.S. markets also took a hit from a Morgan Stanley downgrade of bellwethers Nortel Networks Corp, JDS Uniphase Corp, Tellabs Inc and Sycamore Networks Inc.

That put pressure on Furukawa Electric Co Ltd, Japan's top optic-fibre maker, which was down 5.92 percent at 1,271 yen. It holds a 9.7 percent stake in JDS Uniphase, the world's number-one supplier of fibre-optic components.

Semiconductor testing device maker Advantest Corp slid 5.24 percent to 12,290 yen, underlining a continued slip in chip-related shares after the Philadelphia semiconductor index plunged 6.09 percent, extending Tuesday's five percent fall.

But pockets of the market, including pharmaceuticals, gained ground in a shift of funds into defensives amid the tech fallout.

Takeda Chemical Industries Ltd added 2.53 percent to 6,070 yen.

Reuters contributed to this report.

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