Asia watch

ASIAN stocks drifted down ahead of today's decision on interest rates by the US Federal Reserve Board and Wednesday's publication of the Bank of Japan's Tankan survey of business confidence.

China's official entry into the World Trade Organisation was hailed by some rousing speeches in Beijing but investors in Hong Kong and the mainland worry that the accompanying reforms will mean as much pain as gain.

Investors continued to rethink prospects for technology stocks after a recent runaway performance, and confidence was not helped by an apparent consolidation in New York and warnings from Morgan Stanley strategist Stephen Roach that a U-shaped recovery in the US is likely to be a sickly affair compared with previous bouncebacks.

Japan stocks dithered between profit and loss for most of the day before the Nikkei 225 Average finally lost 97.10 to 10,473.91. Investors stood back ahead of the Tankan survey, regarded as the surest guide to the business view on the economy. The regular pre-publication straw polls by news services in Tokyo suggest some grim reading ahead. All the signs are that the combination of falling profits, tighter credit and slumping domestic demand have reduced confidence to its lowest since March 1999.

The growing gloom was reflected in stock prices with NTT, the country's major telecommunications group and largest quoted stock, touching new lows, as investors fretted about earnings prospects. The 10.1% fall in machinery tool orders in October unsettled technology stocks, led by Sony and Toshiba. Pharmaceuticals group Chugai bounded 13% on moves by Swiss giant Roche to take a stake in the Japanese company.

Hong Kong's Hang Seng index slipped 91.87 points to 11,693.05, led by HSBC Holdings, down HK$1.25 to HK$95.75. The expected rate cut from the Fed will squeeze margins in Hong Kong, where deposit rates are already at a rock bottom 0.25%. Most mainland-related stocks fell as analysts warned that China's WTO entry was just the start of a lengthy and painful process of adjustment.

South Korean and Taiwanese markets were suffering from tech hangovers as investors bailed out after the recent buying binge. Estimates of sales prospects for next year sent stocks such as Korea's Samsung Electronics tumbling by up to 2%, and the Kospi drifted back 3.68 points to 665.09. The Weighted Average index in Taiwan was also suffering from similar falls in major chipmakers, and eased 47.31 points to 5273.97. Year- end window dressing by fund managers brought Singapore's Straits Times index back from the lowest levels of the day, but it still lost 13.54 points to 1602.82.

Australia's All Ordinaries index barely moved, down 1.4 points to 3300.2, as attention was focused on mining sectors and hopes of a round of takeovers in the wake of the battle between AngloGold and Newmont for Normandy Mining. Gold miner Hill 50 shot up 15% after an approach from Harmony Gold, but a fall of 2% in News Corp shares held the main market back.

The Kuala Lumpur Composite lost 3.76 points to 663.35, Thailand's SET index slid 5.60 points to 298.45 and the Jakarta Composite was off 4.82 points at 369.04.

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