Asia bulls pause for breath on new doubts

ASIA'S share surge, which has taken some market indices up by more than 50% from post-11 September lows, began to look fragile today.

The prospect of a further quarter-point cut in US interest rates at the Federal Reserve's Open Market Committee meeting tomorrow did little to inspire investors, who were more concerned about last Friday's worse-than-expected jobless figures.

Weekend warnings that the global bull market was running too far ahead of reality also made investors in recent hard-charging markets pause for thought. Sceptical analysts pointed out at the weekend that the rise had been driven more by liquidity than any fundamental re-rating of the prospects of the recentlypopular sectors.

Technology stocks, which had powered recent rallies, ran into a wave of selling as investors locked in profits and waited to see which way prices would jump next. Japan's big computer-related counters pulled the Nikkei 225 Average down more than 2% and it lost 225.88 points to 10,571.01. Bank stocks were also sliding again ahead of the Bank of Japan's Tankan report on business confidence.

After the spate of bad economic data, including today's figures showing that machine tool orders, a key leading indicator of the economy, fell a shocking 10% in October, the report is expected to paint a bleak picture of corporate prospects.

The collapse of building group Aoki continued to weigh on bank shares, which tested records as investors fretted about yet more collapses adding to the sector's burgeoning bad loan book.

South Korea, Asia's recent wonder market, which had crammed on 52% since 11 September, was the hardest hit as foreigners dumped stock in its semiconductor giants, and the Kospi stumbled 32.28 points, or almost 5%, to 672.22. Rumblings that South Korea's recent consumption boom was being funded by heavy personal borrowing raised fears about the loan base of the country's still largelyunreconstructed banks and added to concerns about the depth of the stock market rally.

Taiwan's market saw a battle between climbing bank shares and falling technology stocks. The tech sector lost out as the Weighted Average fell 12.65 to 5321.28, breaking a seven-day ascent which took it to a seven-month high on Friday. Profittakers in Hong Kong targeted leading banks on concern that another paring of interest rates will slice into profit margins as their deposit rates, now at 0.25% can hardly go lower. The Hang Seng index dipped 83.23 points to 11,748.95.

Doubts about the timing of the US recovery hurt banks and blue-chips in Singapore, where the Straits Times index fell 24.30 to 1604.50. Another round in the bidding brawl for Normandy Mining lifted resources stocks in Sydney, but as other sectors drooped, the All Ordinaries index shed 11.1 points to 3301.6. Normandy climbed almost 5% to A$1.75 as Newmont Mining raised its recent offer to A$1.90, topping earlier offers for the gold miner from AngloGold.

Blue-chips rose in Malaysia and a 5.13-points rise to 666.65 took the Kuala Lumpur Composite index to a key resistance level, but Indonesian stocks drifted with the Jakarta Composite down 0.60 points to 376.61. Thailand's markets were closed for a public holiday.

Prices and indices in this section are supplied from various sources and calculated at different times and may not always match those listed in the tables.