Big Blue blow for Tokyo techs
BIG BLUE dealt Asian technology stocks a blow today as they tumbled after the computer giant warned of sharply lower quarterly earnings.
The shock warning from IBM sent computerrelated shares plunging in Tokyo, and added more gloom to rising fears that higher oil prices could stall an expected economic recovery around the region.
IBM blamed a lack of corporate spending on technology for a huge shortfall in its first-quarter figures. This dimmed hopes that a US recovery would spur the profits of Asia's chip and computer makers. The Nikkei 225 dived 239.81 to 11,113.08, led down by blue-chip technology companies.
Fujitsu, the top computer manufacturer, lost 2.3%, NEC, a major chip supplier, fell almost 4%, and falls also hit Sony, Hitachi and other sector leaders.
The damage to the Nikkei would have been heavier but for a steady performance by the major banks. A leaked report of a survey to be published on Friday by the Financial Services Agency showed the bad-loans total has reached 8.4 trillion yen (£44.6bn), but there was relief that the figures were not even worse.
Mizuho Holdings, the country's biggest lender, led the rally with a 3.5% rise. The gain flew in the face of possible government court action following an embarrassing glitch in Mizuho's cash machines network which left customers unable to access their accounts over the weekend.
Fears are growing in regional markets that Iraq's threat to reduce production for 30 days will push oil prices higher, threatening the nascent recovery in Asia.
The Asian Development Bank forecast that the region's economies, ex-Japan, will grow by 4.8% on average in 2002, up from 3.7% in 2001, and accelerate to 5.8% next year. The caveat was that higher oil prices could mean a reworking of the numbers as most Asian countries rely on imported oil for the their energy needs.
Stocks in South Korea, which is heavily dependent on Middle East oil supplies, slid 1.25% as falls in big oil users pulled the Kospi down 11.23 points to 889.46.
Taiwan tumbled, with the Weighted Average off 112.69, or 1.8%, to 6078.14. Recently-strong financial services stocks were among the hardest hit on concerns that the economy will fall back once more.
Some bottom-fishing among Hong Kong blue-chips generated small gains in morning trading that took the Hang Seng index up 10 to 10,733.7.
As the worst-performing market in the region this year, some international investors are expecting a period of catching up. The overall advance was limited by a big fall in Legend Computer, the largest manufacturer on the mainland, which suffered from the IBM blues. The prospect of higher oil prices continued to weigh down Australian stocks, although the All Ordinaries ended ahead 23.1 at 3363.4.
News Corp shares were knocked nearly 3% on worries about the future of Kirch pay-TV in which the media giant's BSkyB offshoot has a 22% stake.
Singapore technology stocks pulled the Straits Times index down 12.3 points to 1753.4, but Malaysia continued to rise, and the Kuala Lumpur Composite added 3.78 points to 776.04. Thailand's SET index put on 2.92 points to 372.91, while the Jakarta Composite firmed 1.35 to 516.44.
