Nokia and Nasdaq take their toll

THE overnight bath in technology stocks in New York dampened Asian markets today. A fall of more than 2% on Nasdaq, an ambiguous outlook from mobile phones giant Nokia and a steady stream of warnings that the US economic recovery story is looking premature kept investors at bay.

Japanese stocks fell to one-month lows as component producers were depressed by Nokia's warning that handset sales would fall by up to 6% in the second quarter, although earnings would improve.

The Nikkei 225 Average returned sharply to its recent down trend after rallying slightly yesterday, and fell 122.38 to 11,327.06. Biggest faller was TDK Corporation, a major supplier to cellphone manufacturers, which lost more than 3%.

Motor makers went against the trend as the yen began to backtrack on recent strength, lifting hopes of sales and profits benefits.

The markets received no lead from the Bank of Japan, which is leaving monetary policy unchanged, despite signs of a recovery, shown by annualised growth of 5.7% in gross domestic product in the first quarter.

Sentiment was not helped by statements to the Japanese parliament from ratings agency Moody's that the country's credit rating could decline further as the bad debt problems continued to mount, and there were few signs of government action.

In Hong Kong, concern over US recovery centred on shares in Johnson Electric, a major supplier of micro-motors for computers, cars and household gadgets. Shares in the company, which has been seen as a major winner from renewed growth in US consumer spending, slumped 12% yesterday after producing disappointing profits, and fell 3% today as the Hang Seng lost 67 to 11148.

In South Korea, there was more interest in football than stocks as the Kospi rose 7.73 points to 823.06.

Nokia's sales warning was bad news for Taiwan's technology sector. Local suppliers to the Finnish giant tumbled up to 3%, and led the Weighted Average down 5.46 to 5399.96.

The Wall Street plunge sent Australian investors diving for the cover of defensive stocks, with gold shares favoured after an overnight rise in the bullion price. The All Ordinaries ended ahead 50.1 at 3327.9. News Corp shares weakened for the second day as it continued to take fire for the price it has paid for its move into Italian pay-TV.

The search for safe havens saw banks and mining shares move ahead. BHP Billiton added 8%, but the smaller gold miners set the pace, led by Lihir Mining, which gained more than 2%.

Singapore's technology stocks were dealt the inevitable blow by Nasdaq's performance, while investors looked on the dark side of Nokia's sales statement, and the Straits Times index lost 3.9 points to 1652.7.

Thailand stocks reversed yesterday's losses on profit-taking and hopes of a consumer boom boosting the economy lifted the SET index 6.37 points to 425.22.

Two large flotations overhanging Malaysia's market kept investors at bay and the Kuala Lumpur Composite dropped 1.69 points to 748.70, but in Indonesia, the Jakarta Composite firmed 1.55 points to 518.37, taking its year-to-date gain to more than 60%.

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