Topix shows largest fall this year as Asia drops


The Topix saw its largest plunge so far in 2002, with the market questioning how far Japan's recovery can run

By staff and wire reports

HONG KONG, China -- Asian stocks fell on Monday, with Japan showing heavy losses as investors sold off bank stocks.

The broad Topix index fell 2.71 percent to 1025.70, its worst one-day drop so far this year. The Nikkei index of 225 stocks fell 2.35 percent to 10,664.11, feeling less of an effect from banks.

Australia and New Zealand both gained ground. But they were virtually alone, with South Korea down more than 1.5 percent.

Taiwan oscillated between red and black but also finished lower, off almost half a point.

Hong Kong lost just over 1 percent, with doubts over one of China's main cell-phone players, and Singapore is trading lower heading toward the close.

Tokyo fretting about recovery

In Tokyo, financials sold off sharply on worries about Japan's economic recovery and commitment to reform.

Japan's banking No. 2 Sumitomo Mitsui Banking Corp. fell 7.2 percent to 606 yen, with No. 1 Mizuho Holdings off 4.03 percent to 286,000 yen.


Takenaka (r) pledged to push ahead with tax cuts but said the government would act "boldly and flexibly" if necessary

Daiwa Bank, Japan's first "superregional bank," fell 7.14 percent to 91 yen.

Techs were also lower, with Toshiba off 3.02 percent, NEC down 2.04 percent and Sony off 2.13 percent.

Toyota Motor Corp. fell 2.8 percent to 3080 yen. China FAW Group, the largest carmaker in this country, pushed through a merger that helps the two companies partner up (full story).

Back in Japan, economics Minister Heizo Takenaka pledged Monday to continue with the administration's pledge of tax cuts but said the government will act "boldly and flexibly" if necessary.

Little came of the weekend meeting of finance ministers from the Group of Seven industrialized nations. U.S. authorities said there has been no change of their stance on the strong dollar.

The yen strengthened against the dollar on Monday, though, and stands at 124.12 in early London trade.

Japan's trade minister, Takeo Hiranuma, risked a frosty response this weekend with his criticism of Moody's recent downgrade of Japan. Hiranuma characterized Botswana -- ranked above Japan by Moody's -- as a country where "half of the people are AIDS patients" (full story).

Hyundai off ahead of threatened strike

In South Korea, the Kospi finished down 1.56 percent at 809.16. Hyundai Motor Co. dropped 5.2 percent to 39,800 won with union workers threatening a full strike on wages for Tuesday.

Exporters were lower, with screen-maker Samsung SDI falling 3.7 percent to 103,000 won. Investors have showed shakiness over recovery prospects in the United States, its key market.

Fixed-line phone company KT Corp. fell 2.6 percent to 52,000 won on a report that SK Telecom is planning to sell down its stake.

In Taiwan, the Taiex closed down 0.44 percent at 5537.81. Electronics stocks dropped 1.05 percent as a whole.

Taiwan Semiconductor Manufacturing Co., the largest listing in Taipei, dipped 1.99 percent to T$74.00.

Bank stock CTB Financial Holdings was again the most-active stock, up 3.46 percent.

Australia up as News gains

In Australia, the S&P/ASX200 recovered from earlier losses to finish up 0.17 percent at 3,299.7.

News Corp. came off a two-and-a-half year low to rise 2.8 percent to A$11.60. That follows Rupert Murdoch last week closing a deal to buy an Italian pay-TV company for $946 million.

Most mining stocks were steady, BHP Billiton ending flat. But Rio Tinto fell 2 percent to A$34.93.

Investors said they were watching earnings in Australia, given uncertainty in other markets.

In New Zealand, the Top 40 index gained 0.88 percent to 2138.30. Telecom New Zealand gained 0.96 percent to NZ$5.25.

China Unicom hits record low

Hong Kong's Hang Seng index fell 1.13 percent to 10,832.26. China Unicom, mainland China's second-largest carrier, led the way down with a 2.84 percent drop to HK$6.90.

It hit a record low of HK$6.80 during the day, on fears it will not gain customers fast enough to pay off its investment in its new CDMA network.

Bank stock HSBC is still feeling the fallout of the economic strife in Argentina. Worries about its exposure there drove Hong Kong's largest listing 1.38 percent lower to HK$89.25.

Singapore's Straits Times index is lower going toward the close. The index is down 0.3 percent at 1602.89, with professional investors saying there is little for the market to cheer in the city's stocks.