New terror fears deepen gloom

IT IS perhaps understandable that investors' interest in significant anniversaries tends to focus on when events went badly wrong and prices tumbled, rather than when markets sprinted higher. The bad times get the folklore treatment, while the good times are simply forgotten.

Today - two years on from the terrorist strikes on Lower Manhattan and Washington DC - was a case in point. Most Asian markets had a softer bias, undermined before trade started by Wall Street's softness overnight.

Brokers said US equities were pulled down by fresh television images apparently showing a very-much-alive Osama Bin Laden coupled with fears that the recent rally, especially in tech stocks, may have been overdone. The Nasdaq shed more than 2.5%.

There was also a trace of nervousness that there could be fresh strikes somewhere in the region today. The devastating Bali bomb had, after all, been first planned as an anniversary attack, but the plotters could not get their lethal plan ready in time.

Against that gloomy backdrop Japan's Nikkei 225 took a tumble of 309.99 points, or 2.86%, to 10,546.33. Even before anniversary jitters reduced investors' incentives to take positions, the Tokyo market had been plagued by fears it too may have risen too far, too fast.

Tech stocks - supported in recent sessions by positive chip sale figures - were in the line of fire. Advantest, which makes machines that test chips, swooned by 460 yen, or 5.4%, to 8090, while the slump for Tokyo Electron, which makes chip-production equipment, was almost as bad. It dropped 430 yen, or 4.9%, to 8350.

The pullback extended to the other sectors. Manufacturing powerhouse Sony fell 100 yen, or 2.3%, to 4240, while rival Matsushita Electric Industrial was clipped by 40 yen, or 2.6%, to 1504.

Even banks - pumped up last week in hopes that Japan's sluggish economy is at last waking up - were hit by a round of profit-taking. Mizuho Financial eased 2000 yen, or 1%, to 183,000, and Sumitomo Mitsui Financial was off by 8000 yen, or 1.7%, at 461,000.

Australian shares turned weaker following the negative Wall Street signals. The All Ordinaries lost 10.7 points, or 0.3%, to 3205.3 despite a positive set of local jobs data that put unemployment at a 13-year low.

Media giant News Corp, which has a substantial exposure to the US, softened 15 cents, or 1.2%, to A$12.90. Resources plays also suffered, with BHP Billiton down 16 cents, or 1.5%, to A$10.91 and Rio Tinto 30 cents lower at A$30.60, down 0.9%.

Transport group Patrick bucked the trend in the wake of ironing out a squabble with Sir Richard Branson's Virgin Group about the float of their joint-venture discount airline, Virgin Blue. Patrick picked up 16 cents, or 1.2%, to A$13.12.

Hong Kong shares also defied the weaker trend, gaining modestly on property plays. These were aided by news that a Chinese company supported by Beijing may buy up unsold apartments in the former colony.

As Sun Hung Kai Properties rose 75 cents, or 1.4%, to HK$55.25, the Hang Seng index was nudged upwards by 36.01 points, or 0.3%, to 10,846.32.

Taiwanese and South Korean markets were closed for holidays, sparing some of the region's top tech counters from selling pressure.