Earnings fears drive Asian stocks down

By Staff and wire reports

HONG KONG, China - Asian stocks took a knock Tuesday, with earnings worries weighing on markets in Japan and South Korea by the close.

Australian stocks also lost a little ground on skittishness about corporate prospects.

But Hong Kong put on almost 2 percent, driven by China-oriented stocks. Taiwan broke a losing streak to end the day above 5,000.

In Tokyo, the benchmark Nikkei index ended down 1.0 percent at 13,182.00. It broke the 13,000 barrier for the first time since April during the day.

High techs were the big losers. But a late rally by bank stocks eased the pain. The capital-weighted Topix index, which isn't as tech-intensive, fell 0.5 percent to 1,307.55.

Tech angst eased by bank burst

Big U.S. tech stocks such as Intel Corp. and National Semiconductor Corp. report earnings this week. Worries about the results are pulling down Japanese techs.

Sony Corp. fell 1.2 percent to 9,260 yen. Japan's top chipmaker Toshiba Corp. shed 1.2 percent to 667 yn, despite news it had helped develop a way to speed up chips and slash costs.

Japan's big banks have taken it on the chin since they revealed worsening bad loans in late May. Their shares plunged early on Tuesday, then recovered in the afternoon.

Mizuho Holdings Inc., the world's biggest bank by assets, ended up 1.4 percent at 600,000 yen after falling to a year low in the day.

Red chips lead Hong Kong tear

In Hong Kong, the benchmark Hang Seng index put on 1.9 percent to close at 13,451.87.

Hong Kong's red chips, companies headquartered in Hong Kong that do most of their business in China, led the running. The red-chip index rose 2.4 percent to 1,363.33.

Legend Holdings, China's largest computer maker, rose 5.6 percent to HK$5.70. But H shares, China-based companies listed in Hong Kong, lost 1.4 percent.

Investors are still making the most of arbitrage opportunities between Hong Kong's stocks and those in China.

China ended the last restrictions for domestic punters keen on its foreign-currency B share markets last Friday. B shares, which were reserved for overseas investors, have posted three down days since then, leading to reports of dejected Chinese investors.

China's big investors have been selling B shares into demand from the man in the street and buying red chips and H shares in Hong Kong.

That flood of stock drove the Shanghai B share index down 0.1 percent to 220.705 at the close Tuesday.

Shenzhen B share index fared even worse, losing 1.0 percent to end at 375.20. It has lost 11 percent since Friday.

Cautious Sydney dips again

In Sydney, Australian investors continued their recent caution. The benchmark S&P/ASX 200 index finished down 0.1 percent at 3,422.2.

Profit warnings and some high-profile corporate collapses have pushed money into safe havens such as banks over the past week.

But the Australian index remains not far from its record closing high of 3,436.5, struck on May 22.

Property developer Lend Lease closed down 2.2 percent at A$11.25. It has been spiraling downward since a profit warning in December.

Failed junior telco One.Tel has weighed on the market. Its administrator said it would sell One.Tel's assets in a controlled wind-down.

New Zealand's benchmark NZSE-40 cap index blossomed, though. It closed up 2.1 percent at 2,065.86.

In South Korea, the benchmark Kospi ended the day down 2.2 percent at 597.66. Some investors said economic reforms in Korea, which have boosted the market of late, now need to show results.

Samsung Electronics, the world's largest memory-chip maker, closed down 4.3 percent at 203,000 won amid gloom about semiconductors.

Hynix Semiconductor slipped 2.8 percent to 4,210 won after saying it would spin off from parent Hyundai Group on Monday.

Taiwan's Taiex index ended up 1.6 percent at 5,065.06, breaking a four-day losing run. The Finance Ministry announced stimulus measures, expected to be short-lived.

China-oriented stocks were also giving Singapore's markets a run. The Straits Times index was up 0.7 percent at 1,677.94 in afternoon trade.

Reuters contributed to this report.