Asian stocks drop after short-lived gains


In Hong Kong, stocks went into the lunch break down 1.1 percent on big-stock selling with HSBC and China Mobile

By staff and wire reports

HONG KONG, China - Asian stocks tumbled on Thursday, with the Nikkei index heading into the lunch break down 2.1 percent at 10,573.17.

Wednesday's strong gains, driven by a better-than-expected tankan survey of business sentiment, were short-lived.

Tokyo's other main index, the Topix, was down 1.58 percent at 1019.82.

Most Asian markets were down. But Taiwan, which jumped to a seven-month high to close Wednesday with a 5 percent gain, was carrying that through with a 1.9 percent climb in morning trade.

New Zealand - another recent stalwart -- was also in the black in afternoon trade. But Australia was slightly down, despite encouraging jobless numbers.

In Seoul, the Kospi was down 1.7 percent to 670, off 11 points.

Investors in Japan said it was no surprise that Wednesday's optimism had worn off.

"If you take a look at economic fundamentals, you can tell we are in no condition to sustain yesterday's rally," Toshiro Koizumi, fund manager at Chuo Mitsui Asset Management, told Reuters wire service.

Banks off again in Tokyo

Banks were back down again, after a surge on Wednesday. Japan's second-largest financial group, Sumitomo Mitsui, fell 6.5 percent to 549 yen.

It had raced ahead 9 percent on Wednesday.

Camera and copier maker Canon Inc. fell 2.6 percent to 4,470 yen.

In Australia, the government reported an unexpected drop in the unemployment rate, to 6.7 percent for November.

That is down from 7.1 percent the month before. The underlying trends were even stronger than the headline number suggests.

Still, that encouragement wasn't enough to lift stocks. The S&P/ASX 200 index was down 0.24 percent at 3314.1 in afternoon trade.

Weapons developer Metal Storm was performing strongly, up 32 percent to A$2.05, after a successful start to its new listing in the United States.

Australia's biggest gold producer, Normandy Mining, was still attracting attention, up one cent to A$1.78.

AngloGold and Newmont Mining are in a bidding war for the company.

National Australia Bank, the country's largest, was back down after gains on Wednesday. On Thursday, it was off 1.1 percent to A$31.26.

It said Wednesday it is selling its loss-making U.S. subsidiary HomeSide.

New Zealand trading up

In New Zealand, the benchmark NZSE-40 index was up 0.14 percent at 2,074.26 in afternoon trade.

Fisher & Paykel Appliances was performing strongly again, up 10 cents at NZ$9.90.

Telecom New Zealand, the largest listing in Wellington, was up three cents to NZ$5.15, rallying from an early setback.

Hong Kong's Hang Seng index was down 1.1 percent at 11,718.45 at the noon break.

HSBC, the largest listing, was driving blue chip losses, after a fall in London trade the day before.

Property stocks were also off, with Hutchison Whampoa down 1.3 percent at HK$76.25.

China Mobile, the second-largest stock in Hong Kong, fell 0.67 percent to HK$29.75.

The Singapore Straits Times index was off 1.4 percent to 1,572.08 in morning trade, and falling fast. Banks were leading the declines.