Asia stocks drift on chips, currencies


Chip stocks around Asia fell on weaker sentiment on the industry and stronger currencies, a threat to exports

HONG KONG, China (CNN) -- Stock markets in Asia lost ground on Wednesday, with the yen and other currencies strengthening further.

The Topix and the Nikkei both closed down more than 1 percent in Tokyo. South Korea, Hong Kong and Australia all lost close to 1 percent.

Taiwan suffered the most severe fallout of a 1.74 percent dip in Nasdaq overnight. The Taipei market fell almost 2.5 percent.

In Tokyo, the Nikkei ended down 1.89 percent to 10,752.66. The Topix fell 1.23 percent to 1,037.26.

Yen back below 117

The yen stands at 117.76 in early European trade out of Edinburgh. It broke below 118 in New York trade on Tuesday.

Exporters such as Honda Motor, down 2.4 percent to 4,900 yen, suffered. It is spending $466 million to boost U.S. production.

Currency moves are also threatening the export-driven recoveries in progress throughout Asia. Yen flux also disrupts corporate planning.

Chip-equipment makers were dented by a downgrade of U.S. chip companies, their customers, by Merrill Lynch in New York.

Advantest dropped 4.7 percent to 7,340 yen. Tokyo Electron fell 4.05 percent to 7,340 yen. Beer companies fell on threat of a price war.

Korean won also stronger

Tough talk on Tuesday from U.S. President George W. Bush did little to bolster stock markets there or the dollar (U.S. roundup).


The yen strength is making itself felt through Asia, particularly in Japan, where a fragile rebound has set in

The greenback's weakness is generally cited as the main driver behind the yen's run. The Korean won is also stronger, at 1,178.2 to the dollar.

Taiwan took the brunt of the Nasdaq slide, despite figures from its top two chip foundries showing strong sales for June.

TSMC dropped 2.1 percent to T$70.00. United Microelectronics gave up 3.9 percent to T$41.80.

The Taiex dropped 2.35 percent to 5,262.01. That was the first decline in six days. The Taiwan dollar hit T$33.30, a 13-month high.

Big caps down in Sydney

In Sydney, the S&P/ASX 200 lost 0.99 percent to 3,226.2. News Corp. fell close to 3 percent to A$10.50, mapping U.S. losses in its stock.

Telecom listing Telstra fell 0.8 percent to A$4.75 with promise of a third block of stock possibly coming to market.

Mining stocks were also lower. BHP Billiton fell 3.2 percent to A$10.16. Rio Tinto dropped, too.

New Zealand stocks again danced to a different beat, the Top 40 rising 0.21 percent to 2,091.90. Telecom New Zealand rose 1.8 percent to NZ$5.23.

Tom.com leaps on TV deal

In Hong Kong, the Hang Seng ended down 0.51 percent at 10,787.54. Bank stock HSBC closed 1.01 percent lower at HK$90.50.

Broadcaster TVB took a 3.7 percent knock, to HK$31.20, after Li Ka-shing's Tom.com signed a deal to buy into rival ATV (full story).

Tom.com gave up some of its strong gains but still closed up 3.8 percent to HK$3.45. Investors figure this marks Li's entry into the China media market.

Li's Cheung Kong Holdings rose 0.75 percent to HK$66.75.

Korea off on Samsung

South Korea's Kospi market closed down 0.91 percent at 794.71. Samsung Electronics crunched down 4.1 percent to 347,000 won.

It saw a downgrade from Credit Suisse First Boston and suffered from the worsened Merrill industry outlook.

LG Electronics lost 2.1 percent to 51,200 won despite posting record sales for the second quarter.

Hynix climbed 15 percent for the ninth day in a row, to 665 won, with management attempting to salvage the company.

Singapore shares are down 0.69 percent at 1,633.95 in late trade, pressured by chip listings such as Chartered Semiconductor Manufacturing.