Nasdaq jitters upset Far East stocks

HI-TECH shares - stars of the rally in most markets in the opening part of the year - took a beating in Asia after Wall Street signalled that the recent strong gains may have been overdone.

The drop calls into question investors' assumptions about just how rosy the coming months may prove to be. Rattled by falls in their US counterparts overnight, equities in the Asian chip sector dipped by between 2% and 4%.

Undermined by the weakness, Japan's Nikkei 225 Average closed down 98.80 points at 11,433.24. There was added impetus for the sell-down from a mild negative revision in Japanese growth data for the final quarter of last year.

Tokyo Electron, which makes chips, was clipped by 130 yen to 6660. Advantest, which turns out the equipment that tests new chips, shed 130 yen to 8320. The spur for the retrenchment was the sight of the tech-laced Nasdaq trading at its lowest since the start of the year and below the eye-catching 2000-points threshold. The US index lost 13.62 points to 1995.16, the previous low-water mark for 2004 having been 2003.37.

Market-watchers said the persistent inability of the US economy to generate many new jobs even as growth recovers was of special concern. The fear is that, should joblessness continue, consumer demand growth will taper off, hurting sales and profits.

Hi-tech conglomerate NEC was shaved by 14 yen to 827 while Sharp slipped 26 yen to 1834. Electronic consumer goods giant Sony softened 90 yen to 4510 and rival Matsushita Electric Industrial gave up 15 yen to 1594.

Tokyo brokers also looked askance at revisions to gross domestic product data for the October-to-December quarter. Growth was still a respectable 1.6% after the tweak but lower than the first call of 1.7%.

Much the same pattern was evident in Seoul, where the Composite index weakened 13.72 points to 877.86. Samsung Electronics, the bellwether maker of computer chips, dipped 5000 won to 534,000.

Hong Kong shares also had the legs kicked out from under them, partly in line with the prevailing regional weakness and US drop and partly on continued jitters about what measures the new Budget may contain. The Government package was set to be presented today.

Every Hang Seng index constituent was marked lower, except Hang Seng Bank, which trod water at HK$100.50. Port-to-telecoms conglomerate Hutchison Whampoa, run bybnaire Li Ka-shing, fell 75 cents to HK$60 while Cheung Kong, Li's developer, was down HK$1.50 at HK$69.75.

Cathay Pacific Airways, which rallied yesterday ahead of results today, was thumped by 40 cents or 2.4% to HK$16. The Hang Seng index weakened 236.91 points to 13,160.34.

Thai equities stood out, managing to buck the trend as Prime Minister Thaksin Shinawatra ordered a Cabinet reshuffle. As part of the move, Deputy Prime Minister Somkid Jatusripitak was reinstated as Finance Minister, replacing Suchart Jaovisidha.

Somkid is viewed as one of the architects of the country's current boom, which is the fastest in Asia except for China. The SET index rose 1.34 points to 712.

Singapore shares took their cue from Wall Street. With top bank DBS 10 cents lower at S$14.20, the Straits Times index eased by 17.23 points to 1867.97.