Cisco underscores tech concern Tokyo, Hong Kong higher; Seoul, Taipei fall
By Mariko Ando, CBS.MarketWatch.com
3:33 AM ET Feb 7, 2001
TOKYO (CBS.MW) - Fears of a slowing U.S. economy impacting corporate earnings kept Asian markets under wraps Wednesday as tech bellwether Cisco reported disappointing earnings after the bell.
Seoul and Taipei were the region's big losers so far, while Tokyo and Hong Kong stayed above the fray.
Investors were weighing the global outlook for tech shares after Cisco Systems failed to match Wall Street's earnings estimates for the first time in six years, as the company said slower order growth will hurt sales for the next sixth months. See full story.
"Investors don't see Cisco's profit warning as just an independent company's business slowdown; but rather, they see it as a sign of a deceleration of the U.S. economy," said Hiroshi Sato, an analyst at Cosmo Securities.
In Tokyo, the Nikkei Average advanced 0.72 percent, or 96.16 points, to close at 13,366.01 points. The broader TOPIX was up 0.86 percent at 1,267.47 points.
The upside was capped as investors anxiously awaited the Bank of Japan's policy board meeting to be held Friday, when measures to boost market liquidity may be announced.
Sato added, "Plus, people are still worried that the Nikkei hasn't bottomed out yet, thinking it could break below the 13,200-level amid triple negative factors -- earnings jitters, a credit crisis, and continued selling of cross-held shares."
The country's leading mobile phone service operator NTT DoCoMo Inc. (NTDMY: news, msgs) jumped 5.1 percent to 2.28 million yen after being sold-off in recent sessions. High-tech leader Sony Corp. (SNE: news, msgs) gained 2.0 percent to 8,320 yen on media reports that the company has developed the world's biggest 13-inch full-color EL (Electro-Luminescence) display screens.
In New York overnight, the Nasdaq closed up for the first time in three trading days. The Dow posted mild losses.
But Toshiba was down 0.6 percent at 709 yen after the company revised downwards its earnings projection for the current year through March 31. See full story.
NEC Corp. (NIPNY: news, msgs) fell 1.8 percent to 2,180 yen and Fujitsu (FJTSY: news, msgs) ended the session down 0.3 percent at 1,820 yen.
Hong Kong edges up; South Korea falls
In Hong Kong, the Hang Seng Index gained 0.86 percent to 16,049.47, led by a 1.4 percent rise in shares of index heavyweight China Mobile (CHL: news, msgs) , which stood at 49.60 Hong Kong dollars. The company plans to write off as much as 3 billion yuan ($362.5 million) this year over the closing of old phone networks, according to a Credit Lyonnais research report.
Conglomerate Hutchison Whampoa (HUWHY: news, msgs) advanced 1.5 percent to 101.50 Hong Kong dollars. The city's dominant telecom firm Pacific Century CyberWorks (PCW: news, msgs) rose 1.6 percent to 4.70 Hong Kong dollars.
But South Korea shrugged off Nasdaq's climb and headed lower. The Seoul Composite Index slid 1.77 percent to close at 576.19 points. Shares of chipmaker Samsung Electronics (SSNGY: news, msgs) fell 2.7 percent to 195,000 won. Mobile phone leader SK Telecom (SKM: news, msgs) shed 0.6 percent to 254,500 won.
Hyundai Electronics' shares dropped 1.4 percent to 4,800 won after posting a record 2.4 trillion won ($1.9 billion) loss last year on charges for failed investments. This massive loss triggered fears that the company will struggle to repay debt as chip prices slump, Bloomberg reported.
Pohang Iron and Steel (PKX: news, msgs) dipped half a percent to 92,000 won. The world's largest steelmaker plans to invest 8.7 trillion won ($6.92 billion) in the steel sector through 2005, Reuters reported the company chairman as saying.
Australia's market ended lower, failing to get a lift by the central bank's decision to cut key interest rates by 50 basis points to 5.75 percent on Wednesday, the first reduction since December 1988. The All Ordinaries Index ended down 0.41 percent at 3,262.8 points.
Shares of most banks fell. Dominant telecom firm Telstra Corp. (TLS: news, msgs) shed 1.3 percent to 6.88 Australian dollars. But News Corp. (NWS: news, msgs) rallied 3.2 percent to 17.24 Australian dollars, on news that merger discussions between News and Hughes Electronics (GMW: news, msgs) are heating up. See full story.
Taiwan's stock prices opened sharply lower and stayed there. The tech-heavy Weighted Index ended down 2.66 percent at 5,693.58 points, depressed by a 6.6 percent tumble in Taiwan Semiconductor Manufacturing Co. (TSM: news, msgs) , which stood at 91.50 Taiwan dollars. Their shares fell one day after the company warned it expects a sharp drop in sales in the first quarter of 2001, after posting its year-end results. See full story.
In New Zealand, the NZ Top 40 ended virtually flat, up just 0.05 percent at 1,988.01.
Singapore's Straits Times Index gave up 0.26 percent at 1,942.65 points. Malaysia's KLSE Composite ended down 0.51 percent at 729.10.
In the currency markets, the dollar was little moved against the yen and was trading recently at 114.87 yen by mid afternoon Tokyo, against 114.80 yen in New York late Tuesday.
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Mariko Ando is a Tokyo-based reporter for CBS MarketWatch.com.
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