Asia stocks bruised as Japan sells off

By staff and wire reports

HONG KONG, China -- Asian stocks crunched lower on Thursday, as technology stock losses took it to Japan.

The region's biggest market had the largest losses. The Nikkei's 3.4 percent fall outdid Wednesday's heavy selling overnight on Nasdaq in the United States.

Hong Kong also had a hard fall. South Korea and Taiwan also moved down.

But stocks in two countries saw gains. The second biggest Asia-Pacific stock market, Australia, again marched to the beat of a different drummer. It rose close to half a percent.

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

Asia's best-performing stocks this year, China's B shares, had a stellar day, rising close to 10 percent.

A new cabinet for President Megawati Sukarnoputri prompted a "sell on the news" drop in Indonesia, where the Jakarta market closed off 1.2 percent at 437.073.

Tokyo hit by telecom-chip double whammy

In Tokyo, the benchmark Nikkei's strong technology component saw it close down 409 points at 11,754.56.

Telecoms were hammered by a brokerage downgrade from Nikko Salomon Smith Barney.

New data also showed Japan's machinery orders also fell 6.6 percent for June, worse than expected.

All the influences pushed the broader Topix 2.7 percent lower to 1,184.94.

Both the Nikkei and the Topix had their lowest finish since July 30, when the Nikkei hit a 16-year closing low of 11,579.27.

Chip stocks fell despite recent optimism that the beleaguered industry might be bottoming out.

They reacted harshly to Nasdaq's 3.0 percent drop overnight.

Japan's top chipmaker, Toshiba Corp., fell 3.45 percent to 616 yen. It's the largest chipmaker in the world after Intel.

Kyocera Corp., which makes circuits, tumbled 6.21 percent to 9,210 yen.

Nikko downgrades hit home

There was no joy in telecom land. Japan's dominant mobile phone carrier, NTT DoCoMo, skidded 7.03 percent to 1.72 million yen.

Nikko Salomon cut its target price to 3.01 million yen, from 3.52 million, for NTT, which is also Japan's largest stock by market cap.

In India, stocks were shaking off a ratings downgrade by afternoon trade

Its parent, former state-owned phone company Nippon Telegraph and Telephone Corp., dipped 3.97 percent to 629,000 yen.

Nikko cut its target for NTT, too. But it raised it for KDDI, Japan's No. 2 telecom, to 452,000 yen from 410,000.

That did nothing for KDDI's stock, which plunged 8.15 percent to 417,000 yen.

Brokerage leader Nomura Securities Co. fell 4.99 percent to 2,095 yen on the market's gloomy outlook.

Australia breaks stride with pace of economy

In Australia, weak jobs data didn't weigh down stocks. The benchmark S&P/ASX 200 index closed up 0.4 percent at 3,416.8.

The outlook is better for Australia's economy than the rest of the region. The Organization for Economic Cooperation and Development on Thursday pegged Australia's growth rate at 3.8 percent in 2002, nearly double the 2 percent forecast in 2001.

The OECD produces those figures with input from the government.

That helped National Australia Bank, the nation's biggest bank, to finish 1.3 percent up at A$34.94.

Commonwealth Bank climbed 1.5 percent, to A$30.90.

Sydney's biggest stock, media conglomerate News Corp., closed up 15 cents at A$18.20.

Rupert Murdoch's company had initially fallen after General Motors, the ultimate parent of buyout target DirecTV, said it would take seriously at a rival bid by EchoStar.

Asia's worst performer getting worse

In Hong Kong, the benchmark Hang Seng index lost even more ground. On Wednesday, it collapsed through the psychologically important 12,000 barrier that was its support level in the past.

The Hang Seng Index lost 2.02 percent to end at 11,716.77. That's its lowest finish since April 1999.

Hong Kong's property-driven, U.S.-linked market is the worst performing in Asia this year.

Conglomerate Hutchison Whampoa led the losses.

What a different story across the border in mainland China. The B share markets, open to overseas investors, have been the best performers in Asia in 2001.

The erratic exchanges had another extremely strong showing Thursday, as fear about a crackdown by authorities on illegal bank money eased.

Shanghai's B shares pushed the 10 percent legal limit for a one-day rise, rocketing 9.7 percent to 159.973.

The Shenzhen B shares put on 9.2 percent to 273.33.

In Taiwan, the benchmark Taiex index dropped 1.5 percent to 4,448.52, driven down by Nasdaq.

Memory chip maker Winbond Electronics was the most active stock, dropping 5 percent to T$21.10.

The market's largest stock, world contract chip No. 1 Taiwan Semiconductor Manufacturing, fell 3.7 percent to T$65.00.

In South Korea, the benchmark Kospi ended off 2.9 percent at 549.67 for a third day of losses.

World memory chip No. 1 Samsung Electronics lost 3.7 percent to 183,000 won.

The third rate cut in 2001 from Korea's central bank didn't boost stocks.

Singapore's market was closed for the National Day holiday but reopens on Friday.

In Mumbai, trading was normal despite the threat of a rail strike. Unions called off the action.

Reuters contributed to this report.