Tokyo turns around in afternoon stock drift


Japan, Korea and Hong Kong all drifted in afternoon trade, ending with losses and questions about U.S. accounting

HONG KONG, China (CNN) -- Tokyo stocks gave up early strong gains to close in the red Monday.

South Korean stocks also turned around sharply during the day, with questions about accounting again surfacing in U.S. markets.

Hong Kong lost marginal ground, after spending much of the day in the black. Singapore was down one percent at the close.

But Australia and New Zealand closed higher. Taiwan put on more than two percent on the back of techs.

The Nikkei ended down 0.53 percent at 10,769.20 despite Nasdaq's 4.9 percent rise on Friday. Some market players said hitting the 11,000 mark triggered selling pressure.

Tokyo's broad Topix index finished down 0.86 percent at 1,033.99.

The yen is a concern again after Finance Minister Masajuro Shiokawa said his counterparts in Asia and Europe are bearish on the U.S. dollar.

The yen broke through 120 and 119 to the U.S. dollar on Monday, and last traded at 118.80 in trade out of Frankfurt.

Doubts about Merck & Co. in the United States also dealt Japanese and Korean markets a blow.

The Wall Street Journal reported on Monday that drug maker Merck over the last three years booked $12.4 billion in sales that it never collected (full story).

Investors will be watching for second-quarter profits this week in the United States (full story).

Chipmakers end with gains

Japan's economics minister, Heizo Takenaka, said this weekend that the main driver of the yen at the moment is dollar weakness (full story).

Major Tokyo techs locked in rises despite the currency. Sony Corp., one of the country's most-watched exporters, lifted 0.49 percent to 6,180 yen.

Chipmakers Toshiba Corp., up 2.0 percent to 510 yen, and NEC Corp., up 0.72 percent to 840 yen, bucked the general downdrift.

But telecom stock NTT DoCoMo fell 3.56 percent to 271,000 yen. Rival KDDI Corp. dropped 2.45 percent to 359,000 yen.

Bank stocks also suffered, with Mizuho Holdings off 2.4 percent at 284,000 yen.

Seoul also turns to close lower

In Seoul, the Kospi closed down 0.57 percent at 783.35. It also showed a strong early increase but reeled after the Merck report.


The yen strengthened into the 118 range, with talk it could hit 115, and Shiokawa said his counterparts see it weakening

Cell-phone provider SK Telecom dropped 2.7 percent to 272,000 won. Fixed-line telecom KT Corp. lost 2.0 percent to 48,200 won.

Carmaker Kia Motors fell 4.8 percent to 11,900 won. Workers said they will expand a partial strike after talks with management failed.

But chipmaker Samsung Electronics gained 0.3 percent to 359,000 won. Hynix Semiconductor rose the daily 15 percent limit, to 505 won.

That was its seventh such rise in a row, as management looks to salvage the company.

Taiwan up 2.3 percent

Taiwan's Taiex showed the strongest gains in Asia. It climbed 2.33 percent to 5,377.86.

Taiwan Semiconductor Manufacturing Co. soared 6.0 percent to T$71.00. Its smaller rival United Microelectronics gained 3.2 percent to T$42.60.

Flat-screen maker Au Optronics fired ahead the daily 7 percent limit in Taiwan yet again, and other chipmakers gained.

In Sydney, the S&P/ASX 200 index put on 0.59 percent to end at 3,233.7.

Mining stocks led the way. Rio Tinto closed up 3.7 percent at A$35.73. BHP Billiton moved forward 1.8 percent to A$10.48.

That helped offset the largest listing, News Corp. The media group turned around to finish down 1.9 percent at A$10.55.

In New Zealand, the Top 40 finished up 1.33 percent at 2,094.84. Telecom New Zealand drove the index with a 2.2 percent run to NZ$5.15.

Smaller Hang Seng banks off

Like Tokyo, Hong Kong's Hang Seng index showed gains for the much of the day. It closed down, though just 0.09 percent, at 10,796.57.

Bank stocks fell after the Bank of China unveiled its stock offering (full story). Bank of East Asia drifted 1.59 percent to HK$15.50.

HSBC, the largest bank, kept the Hang Seng near break-even with a 0.56 percent rise to HK$90.00.

Singapore's Straits Times index is down 1.2 percent at 1,622.04 immediately before the close.