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Strategies & Market Trends : The Options Box -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (9837)	3/4/2001 12:51:02 PM
From: Poet	Read Replies (1) \| Respond to of 10876

Sunday research. This article talks about the precipitous fall in the Nkkei this past week and its connection to the Nasdaq: WEEK AHEAD-Tokyo stocks weaker, techs have room to slide By Nathan Layne TOKYO, March 4 (Reuters) - Tokyo stocks are seen moving further south this week as Japan's blue-chip techs stay vulnerable to a slumping U.S. Nasdaq and poor investor sentiment. "It doesn't look like the Nasdaq's fall is over and that spells trouble for the techs this week, especially electronics firms," said Hiroshi Arano, director of the investment trust management department at Dai-Ichi Kangyo Asset Management. The benchmark Nikkei average <.N225> slid 3.31 percent to 12,261.80 last Friday, hit by heavy losses in technology issues such as Oracle Corp Japan <4716.T> after U.S. parent Oracle Corp <ORCL.O>, the world's second largest software firm, cut earnings estimates for the third quarter. It was the Nikkei's lowest close since July 31, 1985 when it ended at 12,232.27. The U.S. Nasdaq composite index <.IXIC> buckled under the Oracle warning on Friday, plummeting 3.01 percent or 65.74 points to a fresh 26-month nadir of 2,117.63. The Nikkei shaved off a hefty 7.4 percent last week, shrugging off the Bank of Japan's (BOJ) rate cuts amid an onslaught of data suggesting its ailing economy was faltering further. "If people's confidence in the economy dissipates -- very well possible given the data -- we could see the Nikkei fall considerably lower, maybe another 10 or even 20 percent," said Marc Desmidt, manager of the Japan equity team at Merrill Lynch Investment Managers, referring to government data released last Wednesday that showed industrial output data fell a shocking 3.9 percent in January. Market sources predicted the Nikkei to move between 12,000 and 12,500 this week. WHERE TO HIDE? Traders said low-priced stocks and defensive issues such as pharmaceuticals, utilities, and steel firms were the safest play in the present environment. "Investors will be looking for refuge in shares not susceptible to swings in the Nasdaq," said Yutaka Miura of Shinko Securities. Tokyo Gas Co Ltd <9531.T> firmed 3.16 percent, and Tokyo Electric Power <9501.T> gained 1.31 percent amid Friday's tech fallout. Hideki Kamiya, senior fund manager at Asahi Tokyo Investment said the steep fall in the capital-weighted TOPIX index <.TOPX> was worrisome and deserved more attention as it signified a broad-based, non-tech specific downtrend. The TOPIX fell 2.24 percent on Friday to 1,199.84, touching below 1,200 for the first time since March 1999. "The fall in large-caps stocks is perhaps most scary," Kamiya said, noting heightened downside risk this week ahead of the pending settlement of the special quotation (SQ) of March Nikkei futures and options on Friday. Friday marks a "double witching" session or the simultaneous expiration of options and index futures, which can raise volatility. Analysts said derivatives-related selling, mainly structured bonds with returns linked to the Nikkei's level, was partly to blame for the Nikkei's descent and could accelerate if the average dips further. The so called "Nikkei-linked bonds" offer higher interest rates than ordinary bonds if the Nikkei stays above a pre-determined level. The Securities and Exchange Surveillance Commission of Japan has launched a probe into foreign brokerages for their trading in these stock-index-linked bonds, citing unnatural developments related to the market's dive, the Saturday edition of the Mainichi newspaper reported.

To: mishedlo who wrote (9837)	3/4/2001 8:57:18 PM
From: hobo	Respond to of 10876

EDIT: Futures up only 5 pts now PG&E gets $1bn lifeline By Emmeline Ravilious and Joshua Chaffin in New York Published: March 3 2001 01:24GMT \| Last Updated: March 4 2001 22:20GMT Pacific Gas & Electric, the troubled California electric utility, on Friday said it had refinanced part of its debt obligations with a $1bn short-term loan from GE Capital and Lehman Commercial Paper. PG&E used proceeds from the loan to retire $501m in commercial paper - $457m of which it had defaulted on. The utility also used $434m to service revolving credit lines, and paid $116m to shareholders to compensate them for a dividend it defaulted on during the fourth quarter. The two-year loan should give PG&E some breathing space as it attempts to rectify its current financial malaise. PG&E and fellow utility Sourthern California Edison have racked up about $12bn in debts and both companies have been downgraded to junk bond status. Under the 1996 deregulation law, the companies, who control 40 per cent of California's power grid, are forbidden from passing high energy costs on to customers. Tight supplies and rising wholesale prices have led to the present power crisis - a situation that Gray Davis, California's governor hopes to remedy by buying the companies' shares in California's transmission grid and restoring government control over power supply. news.ft.com