Moody's downgrade fears hit Nikkei

JAPANESE stocks took their second big tumble in two days today as fears that the country's credit rating is about to be downgraded once more by Moody's added to growing gloom about prospects for semiconductor sales. Nasdaq's heavy falls on Friday also unsettled chipmakers around most of the region.

A widely expected move by Moody's to cut Japan's credit rating to that of a smaller emerging market will add to the outrage being shown by the government after this year's round of re-ratings. The government last month took the unprecedented move of complaining to Standard & Poor's about its own downgrading, and Tokyo officials are to meet the agency for discussions, it was reported today.

The Nikkei 225 dived 175.84 to 11,355.27, after a 9% slide in D-Ram memory-chip prices on Friday sent shares of chipmakers and equipment makers down. Good earnings news helped to support some big blue-chips, with the Toyota motor giant up more than 1% ahead of what are expected to be record earnings figures later today. Mitsubishi Motors jumped 2.5% after forecasting net profits would rise almost 40% to a record 38bn yen (£203m) this year.

A surge by property stocks took Hong Kong's Hang Seng index up 87.5 points to 11,733.4. Investors moved in following reports of sell-outs in new residential developments over the weekend, prompting hopes that the long downward spiral in prices was coming to an end. Shares in top builder Sun Hung Kai rose 2.5% on the revived outlook.

Attention in South Korea switched from chips to chickens after an outbreak of foot-and-mouth disease boosted stocks of quoted poultry companies by their daily limit of 12%. The bigger influence on the Kospi's rise of 6.19 to 824.12 was a 6% leap in steel giant Posco following reports that the Korean government was set to impose tit-for-tat restrictions on US steel, following Washington's controversial raising of tariffs on imports earlier this year.

A week-long rally in Taiwan stocks dried up as fears grew that a worsening drought was now becoming severe enough to threaten industrial production, and the Weighted Average fell 75.76 to 5731.54.

A rise to an eight-year high in confidence among Australia's business executives failed to impress investors, who are more worried that recent economic growth will just mean higher interest rates. But the All Ordinaries index rose 23.4 to 3302. Bank shares slipped on worries about dearer money, outweighing any boost from National Australia Bank's index of business confidence, which last month rose to its highest level since 1994. Media giant News Corp slumped more than 2%. Punters are braced for more bad news on Tuesday when Rupert Murdoch is expected to unveil heavy write-downs on US investments in the group's third quarter.

Bargain-hunting among smaller-cap stocks in Singapore left the Straits Times index down 3.2 at 1732.8. There was very little more action in other South-East Asian markets as investors searched for new inspiration from the US. The Kuala Lumpur Composite drifted off 4.14 to 784.40, Thailand's SET eased 1.29 to 380.80, and the Composite index in Jakarta slipped 3.82 to 540.08.

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.