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Strategies & Market Trends : Zeev's Turnips - No Politics -- Ignore unavailable to you. Want to Upgrade?

To: LTK007 who wrote (3597)	11/7/2001 4:15:01 AM
From: LTK007	Read Replies (2) \| Respond to of 99280

<<Asian Shares Stumble Over Tech Talk Nov 7 2:58am ET By Bill Tarrant SINGAPORE (Reuters) - Rate-cut euphoria was decidedly short-lived in Asia on Wednesday as investors turned a fretful eye instead on the precarious health of the tech sector after Qualcomm, a leading wireless firm, issued worrisome results. Asia's key stock markets started off with a bang after the U.S. Federal Reserve performed as expected and cut its key rate by a half a percentage point. But worries about Asia's ailing banks and flailing tech companies soon came to the fore. Yields in Asia's bond markets eased on Wednesday as players grew increasingly convinced that interest rates will drop in the months ahead as other central banks follow suit with the Fed. The rate cut failed to inspire buying in the dollar, which fell to a two-and-a-half week low against the yen. The euro was firming over a prevailing prognosis that the euro-zone economy could fare better than America's, at least for now. The bellwether U.S. tech sector has induced a bit of manic-depressive investment behavior of late. On Tuesday, networking giant Cisco Systems prompted stock rallies around the world after posting encouraging sales results. But Qualcomm Inc. quickly took the wind out of those sails overnight, reporting fourth-quarter earnings below Wall Street expectations and said earnings for the current fiscal year would be at the low end of already reduced estimates. ( this manic-depressive volatility i feel is indicating this is a nervous speculative market running up NOT on confidence but by "forcing" and generalized speculation-max) BAD DEBT WORRIES IN TOKYO "For those that thought Cisco's results pointed to a bottom for the tech sector, Qualcomm certainly ruined their day," said Hirokazu Yuihama, strategist at Daiwa Institute of Research. Tokyo's benchmark Nikkei average closed down 3.28 percent at 10,284.98 6 as the market digested more parlous news about Japan's sickly banks. Mizuho Holdings plunged 8.16 percent to 315,000 yen after the Mainichi Shimbun said the world's largest banking group by assets was poised to nearly double its bad-loan disposals in 2001/02 to around 1.8 trillion yen ($14.86 billion). "The prevailing market sentiment is that there seems to be no end to this bad-loan quagmire," said Kazuyuki Naito, general manager of equities sales at UFJ Capital Markets Securities. Markets around Asia appeared to have already priced in the U.S. rate cut and in any case seem to have concluded the Fed's medicine won't take effect for another few months at least. "A rate cut will help companies down the line, but we will not see much impact in balance sheets for at least six months to come," CitiSecurities Online Vice President Juanis Barredo in the Philippines said. The betting now is the European Central Bank (ECB) at its meeting on Thursday will also slash rates amid signs that inflation eased in the 12-nation euro zone last month. Europe may take more solace than Asia in the U.S. rate cut after Eurostocks on Tuesday had stumbled amid doubts about it. EURO FIRM AHEAD OF ECB Wall Street rallied as interest rates fell below the level of increases in consumer prices, cutting the real cost of borrowing to essentially below zero. The Dow Jones index rose 1.59 percent to 9,591.12 while the Nasdaq ended up 2.31 percent at 1,835.08. Hong Kong stocks reversed early gains on Wednesday and were trading flat by mid-afternoon as investors pondered about falling bank margins in the wake of interest rate cuts. The Hong Kong Monetary Authority chopped its overnight rate also by half a percentage point to 3.5 percent. Hong Kong tracks U.S. rate moves because its currency is pegged to the U.S. dollar. Australian stocks sank one percent on Wednesday with a turnaround in media heavyweight News Corp failing to offset sliding banking and mining shares. Australia's Reserve Bank chose not to follow the 10th rate cut in the United States this year and held rates steady just four days ahead of parliamentary elections. South Korean shares ended a five-day winning streak after Qualcomm dented technology shares. The market opened an hour later than usual to ease traffic congestion for students hurrying to college entrance examination sites -- a huge rite of passage in Confucian Korea. The dollar drifted to a low around 120.70 yen, with the Japanese government still seen ready to step into the market if dollar-yen slips through the 120 level, before coming back to 121.10 yen around 0743 GMT. The euro firmed ahead of the ECB meeting to 90.16 cents from 89.48 cents in late New York trade.<<