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To: NASDBULL who wrote (4928)	9/30/1998 12:17:00 AM
From: TokyoMex	Respond to of 119973

Tuesday September 29, 11:58 pm Eastern Time Asia markets drift downwards after U.S. rate cut (Updates with more markets opening) By Sonali Verma SINGAPORE, Sept 30 (Reuters) - Disappointed Asian stock markets drifted downwards in early trade on Wednesday, unimpressed by a widely expected U.S. interest rate cut. Shares in Tokyo steadied by midday, the key Nikkei index up just 0.04 percent at 13,827.45 after opening softer, while Hong Kong stocks slid more than one percent. Investors anticipating the rate cut had already pushed prices higher over the past few days, so there was little room for a further rally when it happened, traders and market analysts said. ''The small cut in the United States has been completely digested by the market,'' said Hisashi Ebihara, manager of Nikko Research Center. Masaki Higashida, deputy general manager of the equity department of Nomura Securities, said: ''The cut in the federal funds rate by 25 basis points may not on its own be enough to tackle global deflationary pressures.'' Most other Asian markets were following the Dow Jones Industrials index, which closed Tuesday down 0.35 percent at 8,080.52 after the U.S. Federal Reserve's 0.25-percentage-point cut in the key federal funds rate to 5.25 percent. Fed chairman Alan Greenspan, concerned about the impact of global economic turmoil on the U.S. economy, hinted strongly last week that such a rate cut was imminent. ''A 50-basis-point cut by the Fed would have given room for local banks to cut rates after the long weekend,'' said Eric Lee, head of sales at J&A Securities in Hong Kong. Tuesday's reduction did not give Hong Kong banks enough of a margin to manoeuvre, he said. The Hang Seng Index was 1.06 percent lower at 7,754 after 30 minutes of trade, near its low for the day of 7,752.11. In Sydney, the benchmark All Ordinaries index was down 0.4 percent to 2,593.8 at midday. ''I think the Fed's 0.25 percent cut was already well factored into most markets,'' said Hartley Poynton broker Robin Forbes. ''In fact, they may have even been a bit disappointed it wasn't more.'' In Seoul, stocks limped a little higher as investors discounted the U.S. rate cut but welcomed the South Korean central bank's announcement of plans to cut overnight call rates. The Korea Composite Stock Price Index was up 0.04 percent at 312.45 at midday. Brokers said the market was moving in line with Wall Street. While Wall Street was disappointed the move was not as large as the 50 basis points some had hoped for, Fed-watchers said Greenspan would have been anxious to avoid the appearance of panic that a larger move might have had. The discount rate, charged for emergency loans to banks, was left unchanged. In Singapore, the Straits Times Index was down 1.06 percent at 928.54 in early trade. Dealers said the decline was an expected pattern of buy on the rumour, sell on the fact. ''It was across the board, but it's not alarming. I think the market still has more steam to go up,'' said an analyst with a local brokerage. ''The whole world was talking about 25 basis points, so I think it was well within expectations. We were just hoping that the market would continue to surge for one more day,'' said one institutional dealer with a foreign brokerage. In Taiwan, the benchmark index shares opened down 0.19 percent at 6,871.57 amid weak sentiment after the central bank's earlier rate cuts failed to boost share prices, but brokers said they expected state-linked funds to support the index. The New Zealand market had gained 1.35 percent by 0330 GMT. In Jakarta, shares fell in quiet trade as investors stayed on the margins, worried by possible political unrest and subdued by regional markets, dealers said. The composite index was down or 0.4 percent at 275 points in early trade. But shares in the Philippines bucked the general downwards trend, up 1.04 percent to 1,251.02 in early trade. Kuala Lumpur was little changed. -------------------------------------------------------------------------------- Related News Categories: US Market News