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Most Asian markets fall as BOJ holds meeting

Most Asian markets fell, as shares in both Tokyo and Hong Kong declined for the second straight day.

india Updated: Mar 08, 2006 17:52 IST

Most Asian markets fell on Wednesday, as shares in both Tokyo and Hong Kong declined for the second straight day. The benchmark Nikkei 225 index shed 98.53 points, or 0.63 percent, to finish at 15,627.49 points on the Tokyo Stock Exchange. The Tokyo market has now fallen in five of the last six sessions amid growing expectations that the central bank will scrap its five-year policy of quantitative easing, which kept interest rates at zero and flooded the financial system with excess cash to spur borrowing.

With the economy recovering, the bank could announce the end of that policy on Thursday. Experts say the bank will most likely to wait and raise interest rates some months later.

Traders sold off high-tech stocks after four straight sessions of declines on the Nasdaq market in New York. Steel and retail issues were also among morning losers, as well as machinery stocks. Heavy selling on the futures market ahead of Friday's expiration of March Nikkei 225 futures further depressed the market.

"We're seeing a combination of concerns over the Bank of Japan and feedback from the futures side ahead of special quotation day weakening the market," said Hitoshi Yamamoto, president of Commerz International Capital Management in Tokyo.

Decliners included Nippon Steel Corp, machinery maker Fanuc Ltd, and department store Mitsukoshi Ltd.

The Bank of Japan's policy meeting was also being closely watched in New York, where some investors are concerned that higher interest rates in Japan and Europe could prompt the Federal Reserve to raise US rates.

US stocks closed mixed Tuesday as bond yields remained high. In Hong Kong, shares fell for a second day, with index heavyweights HSBC Holdings PLC and China Mobile (Hong Kong) Ltd leading the downward trend.

The blue chip Hang Seng Index fell 109.27 points, or 0.7 per cent, to 15,493.09.

China Mobile, the largest mobile operator in China by subscribers, fell 1.1 per cent to HK$35.95. HSBC, the largest constituent on the benchmark index by market capitalization, slipped 0.2 per cent to HK$132.40.

Hong Kong's leading carrier Cathay Pacific Airways Ltd. fell 3.2 per cent to close at HK$13.65, after reporting on Wednesday a 25.3 per cent decline in 2005 net profit. The airline blamed the fall in profit on record-high jet fuel prices despite strong growth in passenger demand.

In currencies, the US dollar was trading at 117.56 yen on the Tokyo foreign exchange market late on Wednesday, down 0.33 yen from late Tuesday in New York. The euro rose to $1.1917 from $1.1885 on Tuesday.

Elsewhere:

Jakarta: Indonesian shares ended lower, led by further price correction in select automotive and bank blue chips amid fears of poor 2005 earnings due to high interest rates and inflation. The Jakarta Stock Exchange Composite Index ended down 12.66 points, or 1 per cent, at 1,233.60.

Kuala Lumpur: Malaysian shares finished down in follow through selling as investors took their cue from weaker regional bourses. The weighted Composite Index of 100 blue-chip stocks finished down 0.2 per cent, or 1.68 points, at 913.53.

Manila: Philippine stocks fell for the second day as investors fretted over prospects of higher interest rates and talk of heavy selling by government financial institutions. The benchmark 30-company Philippine Stock Exchange Index fell 22.65 points, or 1.1 percent, to 2,099.26, adding to its 1.2 per cent loss on Tuesday.

Seoul: South Korean shares edged down for the fifth session in six as foreign investors sold Samsung Electronics Co on concerns about its first-quarter earnings. The Korea Composite Stock Price Index, or Kospi, fell 0.2 per cent, or 2.62 points, to 1,314.05.

Shanghai: China's shares ended lower on concerns over a possible resumption of initial public offerings and expectations for weak corporate earnings. The benchmark Shanghai Composite Index, which tracks both A and B shares, ended down 0.8 percent at 1,250.38.

Singapore: Singapore's shares closed higher, helped by mild bargain hunting and a stronger Wall Street overnight. The Straits Times Index closed up 13.45 points, or 0.5 per cent, at 2,502.60.

Sydney: Australian stocks fell slightly as resource shares were hit by lower base metal prices. The benchmark S&P/ASX 200 index fell 6.7 points, or 0.1 per cent, to 4,873.0.

Taipei: Taiwan's shares dropped, led by chip and liquid-crystal-display panel stocks after losses in their US tech counterparts overnight. The Weighted Price Index of the Taiwan Stock Exchange fell 34.58 points, or 0.5 per cent, to 6,459.57.

Wellington: New Zealand's stocks slipped slightly as a drop in bellwether Telecom offset strong gains in export and currency-sensitive stocks. The benchmark NZSX-50 index ended down 9.21 points, or 0.3 percent, at 3,449.48.