Bank nerves reverse Nikkei export gains

THE falling yen continued to translate into higher prices for shares of

Another reminder that the playing fields in China are rarely level hit Hong Kong stocks as locally-quoted mainland mobile phone groups crashed after news that the market was being opened up to powerful new competition.

The region's two hot markets, South Korea and Taiwan, regained some of their poise after a hefty bout of profit-taking yesterday had ended the recent bull run.

As the yen tested three-year lows, shares in Sony and semiconductor equipment manufacturers made modest advances, but not enough to prevent the Nikkei 225 Average slipping 31.62 points to close at 10,663.98.

Frantic rescue efforts by creditors of the failing Daiei group, Japan's second-largest retailing chain, were a sharp reminder of bad-debt problems facing the banks. Investors swiftly cashed in on recent gains generated by indications that the government was ready to step in to help banks. The big two, Mizuho, and Sumitomo Mitsui, fell by more than 2% as the market awaited hard news of any rescue.

Hong Kong's cellphone rivals China Mobile and China Unicom slumped after Beijing confirmed it would hand out two more national mobile licences to China Telecom. Although it will be at least two years before the new licences come into effect, stocks of both companies slumped by more than 6% on fears that long-term profit forecasts would have to be torn up.

With bank stocks also tottering on fears of Argentinian fallout, the Hang Seng index plunged 272.99 points to 11,440.72, shattering-recent predictions that the next stop would be 12,000.

Technology stocks returned to favour in Taiwan and South Korea and remain institutional favourites despite their recent falls. Taiwan's Weighted Average rose 55.64 points to a nine-month high of 5865.54, led by major chipmaker Taiwan Semiconductor.

The launch in the US of the new Apple iMac to great acclaim sparked heavy buying of Taiwanese notebook manufacturer Quanta on rumours that it would be a major supplier to the US group.

Seoul resumed its role as pacesetter with a 2% advance, as Hynix Semiconductor bounced up almost 4% on renewed talk that it was about to announce a serious link-up with the US Micron chip giant. Undeterred by yesterday's profit- taking, investors also moved in on domestic plays and the Kospi responded with a jump of 16.85 points to 751.61.

Singapore's sound-card leader, Creative Technologies, soared 8% on hopes of improving global PC sales, but poor earnings figures elsewhere pulled the Straits Times index down 17.82 points to 1,686.20.

A big switch out of blue-chips in Sydney took the All Ordinaries index down 9.3 points to 3354.9 at the close. Qantas was the exception, up more than 2% on hopes of an improving outlook for world airlines.

South-East Asia's smaller markets all firmed. In Malaysia the Kuala Lumpur composite index rose 8.26 points to 700.47, Thailand's SET index rose 0.60 to 319.24. and Indonesia's Jakarta Composite was up

3.804 points, to 391.498.