IQ ........ By Kathleen Kearney
HONG KONG, Nov 25 (Reuters) - Hong Kong's Hang Seng Index dropped sharply on Tuesday morning on repercussions of the failure of Japanese brokerage Yamaichi Securities and the Nikkei's sharp fall, brokers said.
The key index of blue-chip stocks dipped to a low of 10,330.15 shortly after the open before clawing back to trade 143 points, or 1.35 percent, lower at 10,443.
''We need a bit of time to digest this news,'' said Steve Lo, dealing director at OSK Securities Asia, referring to the failure of Yamaichi on Monday.
''But in fact Hong Kong is down only about 200 points. That's quite strong compared with the rest of Southeast Asia.''
The trend in Hang Seng Index futures was more bearish, with the November contract opening at a low of 10,300 then edging up to trade 300 points lower at 10,340.
The November contract expires on Thursday.
Japan's Nikkei 225 was trading more than four percent lower and South Korea's composite index was nearly four percent down.
Markets in Kuala Lumpur, Manila, Singapore and Taipei were all trading lower.
Prior to the Yamaichi announcement, the technical picture had improved and the index will need more consolidation at this level, analysts said.
''I expect the market to trade in a range between 10,100 and 10,600,'' said Ted Chen, regional technical analyst at Indosuez W.I. Carr.
(US$1 - HK$7.73) ^REUTERS@
23:10 11-24-97
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