Asian stocks retreat from highs


Japan's Nikkei fell for the first time in five days, as recent gainers like Sony gave ground

By staff and wire reports

HONG KONG, China -- Asian stocks pulled back on Tuesday, with South Korea and Taiwan coming off multimonth highs.

Japan's Nikkei 225 lost 1.4 percent to end at 10,575.62. That was the Tokyo market's first drop in five days, as tech stocks retreated after recent gains.

The broader Topix index closed off 0.88 percent at 1,055.58.

Australian and New Zealand markets moved higher. China stocks also gained almost 2 percent, as regulatory changes continue to spur investors.

But more Asian markets than not traded down for the day. Indian stocks were off 0.8 percent in early afternoon trade.

Singapore was weathering tech sales and stood basically flat just before the close.

Budget news has little effect in Tokyo

In Tokyo, the tide turned against blue chips, which have gained in Japan's four-day rally.

The market was also weighing the virtual certainty of a second supplementary budget, just days after parliament passed the first.

Though not confirming a report that Prime Minister Junichiro Koizumi has already decided on a new plan of more than 2 trillion yen, cabinet members said they have been batting around the idea.

But the prospect didn't budge stocks a great deal and even had only a small effect on the bond market.

Traders had anticipated the move. There was selective buying of some stocks likely to benefit from urban development projects, expected to be a focus of the new budget.

Electronics maker Sony Corp. fell 3.1 percent to 5,650 yen. It often leads the way for the tech sector in Tokyo and has been the sector's biggest gainer of late.

Fujitsu Ltd., one of Japan's Top Five chipmakers, fell 4.7 percent to 1,000 yen. It came back into favor last week on prospects of stronger U.S. consumer demand.

Australia again breaks with pack

In Australia, the benchmark S&/ASX 200 index again broke from the Asia-Pacific pack. It rose 0.63 percent to 3,353.0.

It is close to a three-month high, as hope of economic recovery lures investors from the defensive stocks they have favored to more speculative plays.

News Corp., the largest listing, rose 2.4 percent to A$15.20. That's its highest level since September 7, as the company benefits from fresh hope of a U.S. economic rebound. It gets around 70 percent of its profits in the United States.

ANZ bank continued its slide from recent highs, dropping 1.2 percent. Other banks were in positive territory but off their own record levels.

Flagship airline Qantas continued its oil-induced run, hitting a two year high before dropping back to end at A$4.22.

Leading telecom Telstra rose 7 cents to A$5.15.

In New Zealand, the NZSE-40 capital index rallied 1.2 percent to 2,042.49.

Investors said it was gaining from Wall Street's overnight rise as well as the Asia Pacific's relative strength.

Telecom New Zealand also lifted 7 cents to NZ$4.97. It accounts for 22 percent of the index.

South Korea, Taiwan off high points

In South Korea, the Kospi gave way to late selling, giving up 1.6 percent to end at 616.33.

It hit a year high of 636.03 soon after the open, which traders said left it open to inevitable correction.

Still, the index held up relatively well, considering chipmaker Hynix Semiconductor's lagging influence.

The troubled stock fell 11.1 percent to 1,715 won on the heaviest turnover.

Its lead creditor, Korea Exchange Bank, was off 5.9 percent as investors worry about a cut in capital at Hynix.

Korea's largest cell-phone company, SK Telecom, dropped 2.17 percent to 271,000 won.

Taiwan was also seeing profit taking after a recent strong run. The Taiex fell 2.04 percent to 4,455.80.

The electronics subindex was off a particularly sharp 4.26 percent.

Memory chip maker Winbond Electronics was the most active stock, down 3.8 percent at T$13.80.

It's unusual for Taiwan's market to break with Nasdaq in the United States. But it did Tuesday, as its largest listings fell.

Chip foundry Taiwan Semiconductor Manufacturing Co. fell 6.3 percent. It is Taipei's heaviest-weighted stock.

Hong Kong's benchmark Hang Seng index lost 1.2 percent to end at 11,225.79.

The second largest listing, China Mobile, lost 4.55 percent to HK$27.35.

China Unicom, its rival in the mainland cell-phone market, fell 5.35 percent to HK$8.85 percent.

Despite strong morning gains, embattled telecom Pacific Century CyberWorks ended up just 2.1 percent at HK$2.45.

But China's B share markets, open to overseas investors, finished up for the day as government officials were quoted in local media with favorable policies for investors.

Shanghai ended up 1.99 percent and Shenzhen, 1.73 percent.

Singapore's Straits Times index was up 0.08 percent at 1,453.41 in late trade.

In India, the main Mumbai index was off 0.8 percent at 3,254.01 shortly past 1 p.m. local time.

Reuters contributed to this report.