Doubts undo Asia stocks by close

By staff and wire reports

HONG KONG, China -- Asian stocks failed to hold onto early gains Monday.

Uncertainty over poor economics in Asia and the possibility of contagion from the crisis in Argentina saw stocks slump to a lower close.

Japan ended with narrow losses. Taiwan's markets set a new seven-year low, amid persistent growth problems.

Investors also sold on news of Beijing's winning bid to host the 2008 Olympics. Of the region's biggest markets, only Australia and South Korea ended with gains.

DoCoMo down in Japan

In Tokyo, the tech-sensitive Nikkei average lost 0.10 percent to close at 12,343.37. The broader Topix fared even worse, slipping 0.15 percent to 1,242.21.

The market's biggest stock, mobile-phone giant NTT DoCoMo Inc., lost 2.0 percent to 2.0 million yen.

Investors were worried to see NTT DoCoMo, Japan's largest stock, sink after holding ground lately

DoComo's drift summed up the light trading day, where interest was scant ahead of earnings from Intel and IBM this week in the United States.

"Foreign and domestic institutional investors are keeping quiet. That means the market lacks energy, with only small-lot orders centered on lower-priced issues," said Hiroichi Nishi, general manager of Nikko Securities' products group.

Another stock that had held up relatively well, printing machine and camera maker Canon, lost 2.2 percent to 4,430 yen.

Hot weather helps

Hot weather helped offset some of the technology drift. Kirin Brewery Co., Japan's biggest brewer, tacked on 3.5 percent to 1,062 yen.

It rose on hopes of strong sales as consumers try to beat the heat. Its beverage affiliate Kirin Beverage Corp. jumped 3.1 percent to 2,865 yen.

Rival Asahi Soft Drinks rose 3.3 percent to 853 yen. Calpis Co., which makes a popular lactic-acid drink for children, soared 4.82 percent to 587 yen.

After the market close, U.S. fast-food giant McDonald's Corp.'s Japanese unit set its initial public offering price at 4,300 yen a share. That's the height of its range of 3,000 yen to 4,300 yen.

The offering will be one of Japan's biggest this year, raise 51.6 billion yen.

Australia shows strength

In Sydney, Australian stocks trotted to a strong close. The benchmark S&P/ASX 200 index finished up 0.7 percent at 3,421.2 on modest turnover.

It was helped by a surge in its biggest player, media giant News Corp. News shot up 3.5 percent to A$18.42 on a report a rival had pulled out of the running for U.S. satellite company DirecTV, which News is trying to buy.

Uncertainty pushed many investors back into the arms of the defensive banking sector, which rose more than 1 percent.

National Australia Bank, Australia's biggest bank, led the way, with a 1.3 percent rally to A$32.98.

Mining stocks were also stronger. BHP Billiton rose nine cents to A$10.63.

Australia's second largest stock, and the country's largest telecom group, Telstra lost 2.1 percent to A$5.15.

In New Zealand, the benchmark NZSE-40 Capital index fell 0.6 percent to 2,031.78.

Its biggest stock, Telecom New Zealand, hit its lowest level since February in the day and closed down 11 cents at NZ$5.07.

Boost not big enough for Taiwan

Taiwan shares were particularly badly hit in afternoon trading. The benchmark Taiex ended down 2.6 percent at 4,368.69 on margin-call selling.

That's its lowest close since November 30, 1993. It has fallen 7.8 percent this year.

The market's second-biggest stock, microchip foundry United Microelectronics Corp., dropped 1.4 percent to T$36.60, on reports it would lay off 266 workers.

The Taiex had opened higher on the prospect of gains from Beijing's hosting of the 2008 Olympics.

Hong Kong investors also sold on the news. The benchmark Hang Seng index lost 0.1 percent to 12,624.53.

Beijing's victory injected life into stocks like travel agency China Travel, which rose 1.4 percent to HK$1.42.

But Hong Kong's H-share index of China-based companies trading in Hong Kong, sold off sharply, down 3.4 percent at 479.01.

The red-chip index, made up of Hong Kong companies that do most of their business in China, lost 1.4 percent to 1,123.18.

Small-engine maker Johnson Electric rose 4.2 percent to HK$11.15 after data showed a rise in U.S. consumer confidence. Johnson gets most of its sales in the United States.

Airline Cathay Pacific rose 2.9 percent to HK$10.85, as operations resumed to something near normal after a dispute with its pilots.

In South Korea, the benchmark Kospi index rose 0.1 percent to 548.93.

In Singapore, the Straits Times index was down 0.2 percent at 1,654.28 in afternoon trade, in line with the rest of the region.

Reuters contributed to this report.