Asian stocks lag as chip luster pales

Japan's chip makers couldn't sustain Thursday's heady pace, but Taiwan and South Korea saw it carry through

By staff and wire reports

HONG KONG, China -- Asian stocks headed south on Friday, as chip-stock optimism lost its luster.

Japan closed sharply down, with bank stocks losing ground again. Losses in China-oriented stocks sank Hong Kong's market.

But Australia ended with a narrow gain. And Asia's most chip-dependent markets, South Korea and Taiwan, set multiweek highs.

Investors are enjoying new hope the battered sector might have bottomed out.

Toshiba falls after Thursday's jump

In Japan, the benchmark Nikkei 225 lost 1.3 percent, to end the week at 12,241.97. It had raced ahead 3.7 percent the day before as its chip stocks jumped.

Japan's No. 1 chipmaker, Toshiba Corp., the world's second-biggest, fell 1.1 percent to 638 yen.

It stormed ahead 7.9 percent on Thursday, after Merrill Lynch made a bullish call on chip stocks.

Tokyo's broader Topix index dropped 1.2 percent to 1,219.92.

Chip-equipment maker Tokyo Electron Ltd fell 2.8 percent to 7,710 yen. It posted a 3.5 billion yen net loss for the June quarter after the bell on Thursday, down from a profit the same time last year.

Tech bellwether Sony Corp. lost 2.2 percent to 6,360 yen after three days of gains. It hit a 16-year closing low on Monday after a shock 90 percent profit drop.

Among banks, Mizuho Holdings, the largest group in the world by assets, slid 5.3 percent to 499,000 yen.

It said after the close Thursday it was taking 800 billion yen in loan-loss charges for the year to next March, up 60 percent from its original estimate.

Investors worry Japan's banks are running up bad loans faster than they can write them off.

Mining stocks off in Australia

In Sydney, the benchmark S&P/ASX 200 index was almost flat, rising 0.04 percent to 3,405.4.

More stocks dropped than rose. But the market, a stalwart in the Asia-Pacific region of late, still gained 3.4 percent this week.

Mining stocks lost ground Friday. Anglo-Australian listing Rio Tinto fell 0.8 percent to A$33.52 after it warned falling metal prices over the next 12 months would hurt its earnings.

But BHP Billiton, the market's biggest mining stock, rose 11 cents to A$9.99.

In Hong Kong, the benchmark Hang Seng index ended down 1.6 percent at 12,269.08.

The H share index of China-based companies trading in Hong Kong lost ground at twice that rate, closing down 3.3 percent.

There are lingering fears that China's authorities are cracking down on mainland investors smuggling money into Hong Kong to play the cheaper markets there.

Beijing North Star, a Chinese construction company, lost 8.8 percent to HK$1.35. Red chip Denway Motors lost 8.0 percent to HK$2.35.

China Mobile, Hong Kong's second-largest stock and the mainland's largest cell phone company, dropped 3.4 percent to HK$34.40.

Taiwan and South Korea up

In Taiwan, the benchmark Taiex closed at a three-week high. The index rose 0.9 percent to 4,530.68.

Taiwan's battered market has enjoyed the most joy from the renewed optimism about chips, the island's premier export product.

On Friday, memory chip maker Winbond Electronics again rose the daily limit of 7 percent, closing at T$23.20.

But the largest stock, chip foundry Taiwan Semiconductor Manufacturing Corp., lost 2.1 percent to T$69.00. Its stock had risen 22 percent over seven days.

In South Korea, the benchmark Kospi hit a four-week high. The Kospi closed up 0.2 percent at 568.69.

The largest stock in Seoul, world memory chip No. 1 Samsung Electronics, rose 2.1 percent to 199,500 won.

The heaviest trading was in Hynix Semiconductor, world memory chip No. 3. The troubled company's stock rose 0.6 percent to 1,625 won as investors figure it may land fresh funding.

Pohang Iron and Steel, the world's second largest steelmaker, rose 2.2 percent to 92,200 won.

In Singapore, the Straits Times index was trading down 1.1 percent at 1,652.43 in the afternoon.