Asian stocks suffer


China's entry into the WTO will give cities like Shanghai a boost, and helped Hong Kong's China plays close higher

By staff and wire reports

HONG KONG, China -- Asian stocks succumbed Tuesday to pressure on Japan's banks as well as a spillover from a U.S. slide the day before.

They also got little joy out of China's formal approval into the World Trade Organization, a month after the global group voted on their accession.

Tokyo closed lower for the third day in a row, with the benchmark Nikkei index ending down 0.92 percent at 10,473.91.

The Topix, which had been outdoing the Nikkei's losses for much of the day, closed down 0.85 percent at 1,014.69.

The only signs of any strength in the Asia Pacific region came from Down Under.

Australia closed only narrowly lower, propped up by a surge in gold stocks on merger activity. New Zealand forged ahead with a gain of 0.73 percent.

South Korea marked a late comeback to close slightly in the black. Taiwan stocks dropped close to one percentage point, with Hong Kong performing only slightly better.

Singapore was also down about a half point in the last hour of trade. Indian stocks were driving ahead solidly, though, in afternoon trade.

Drug stock focus

The Tokyo market dropped despite good gains in drug stocks.

This sector rallied after Roche Holding AG said it would buy 50.1 percent of Japan's 10th-biggest drug company, Chugai Pharmaceutical Co.

Chugai closed up 13.86 percent at 1,725 yen. Roche plans to merge it into its Japanese subsidiary.

That could be a start to consolidation in the fragmented industry, investors were betting.

But the optimism didn't spill over to other sectors. The Japanese yen weakened against the U.S. dollar, at 125.96 to the greenback.


This has been China's year, as it joined the WTO, won the 2008 Olympics and made it to the soccer World Cup for the first time

A weak yen normally helps exporters. But it did little to boost Sony Corp., which closed down 3.15 percent at 5,840 yen.

That's a third straight day of losses for a stock that often drives the tech sector.

Banking stocks sank to new lows, giving up all the optimism they gained by increasing loan-loss provisions.

Three of Japan's four biggest banks hit lifetime lows in morning trade, dragging the bank index to a level not seen in almost 18 years.

UFJ Holdings Inc., Japan's No. 4 bank, gave up 3.4 percent to 287,000 yen. That's on top of the 15 percent it has lost since midsize construction company Aoki collapsed last week.

UFJ is a major creditor. But the specter of further corporate failures is haunting all of Japan's banks.

The Bank of Japan releases its quarterly tankan survey of corporate confidence on Wednesday morning.

Sydney gold gets a rise

In Australia, the benchmark S&P/ASX 200 index ended down 0.03 percent, basically flat at 3,3359.6.

South Africa's Harmony Gold fueled the merger fever in Aussie gold stocks, with an A$234 million bid for mid-size producer Hill 50. Hill 50 ended up 15 percent at A$1.38.

That comes hard on U.S. gold company Newmont's improved A$1.90 cash-and-stock offer for Normandy Mining, Australia's largest gold producer.

Normandy ended up 3 cents at A$1.78. Investors are waiting to see if South Africa's AngloGold will improve its bid.

News Corp., Australia's largest listing, fell 2.8 percent to A$15.54. Chairman Rupert Murdoch said Monday he wasn't considering a hostile takeover of Germany's Kirch Gruppe.

Telstra, Sydney's second-largest stock, fell 4 cents to A$5.40.

Australia's largest winemaker, Southcorp, rose 4.6 percent to A$7.63 after selling a water heater business.

Across the Tasman, the New Zealand market moved ahead 0.73 percent. The NZSE-40 index ended at 2,067.55.

Turnover was light. The main driver was the largest listing in Wellington.

Telecom New Zealand ran up 2.4 percent to NZ$5.15. That's its highest close since the end of August.

South Korea back to black

In South Korea, the benchmark Kospi ended up 0.2 percent at 670.08, after spending much of the day in the red.

Domestic buying finally started to offset selling by overseas investors. Samsung Electronics Co., a fund favorite and Seoul's largest listing, dropped 0.58 percent to 258,500 won.

LG Electronics Co., the largest home-appliance maker, dropped 3.1 percent to 25,000 won.

Leading cell-phone carrier SK Telecom broke its run of losses, climbing 1.39 percent to 256,00 won.

Taiwan's market fell for the second day in a row. The Taiex lost 0.89 percent to end at 5,273.97.

Investors were waiting to see what happens at Tuesday's meeting of the U.S. Federal Reserve Board, after Nasdaq fell 1.44 percent overnight.

The Dow Jones industrial average lost 1.27 percent.

Taiwan's electronics

In Taipei, the electronics subindex that normally drives the market actually gained 0.87 percent.

But banking stocks -- recent strong gainers thanks to a change in the law -- suffered a 4.6 percent slide.

Taiwan Semiconductor Manufacturing Co., the largest listing in Taiwan, rose 1.8 percent to T$85.50. Its rival, United Microelectronics Corp., climbed 1.7 percent to T$49.20.

In Hong Kong, the Hang Seng index ended the day down 0.78 percent at 11,693.05.

The largest listing, bank HSBC, was a big drag, down 1.29 percent at HK$95.75.

Cathay Pacific, Hong Kong's main airline, dropped 4.67 percent to HK$10.20 after Australian rival Qantas said it is starting a budget airline to serve Asia, including Hong Kong.

Johnson Electric, a small-motor maker that gets most of its sales in the United States, fell 7.3 percent to HK$8.30.

Hong Kong did get a slight rise out of its China plays, as China officially joins the WTO after a 15-year quest.

The Hang Seng mainland composite index rose 0.62 percent.

But investors largely shook off the long-awaited rubber-stamping. The Shanghai B share market fell 1.5 percent. Shenzhen B shares -- open to overseas investors -- fell 2.03 percent.

One analyst said the WTO effect has been fully reflected in China's markets already.

Singapore's Straits Times index was down 0.4 percent in the last hour of trade, at 1,609.83.

Trading was choppy, with many investors on the sidelines. Bank stocks were hurting.

In India, Mumbai's main stock index was up 0.34 percent in afternoon trade, boosted by gains in drug and cement stocks.

Reuters contributed to this report.