NTT alert hits Nikkei rescue bid

EVEN heavy pump-priming by government-controlled pension funds could not keep Japanese stocks ascending today as warnings of massive losses pulled down shares in telecoms giant Nippon Telegraph & Telephone (NTT).

Threats by embattled Prime Minister Junichiro Koizumi to call a snap election also unsettled investors, leaving the Nikkei 225 Average down 43.71 points at 11,336.49 at the close.

NTT shares plunged more than 3% after warnings that massive write-offs on its overseas investments would send it 865 billion yen (£4.6 billion) into the red in the year to the end of March, two trillionse yen (£10.5 billion) worth of investment writedowns and reorganisation costs.

Its mobile phone offshoot NTT DoCoMo, also set to unveil the first loss in its history following big losses on overseas networks, followed its parent down.

The Nikkei's losses were limited by strong performances in retail stocks on reports that the government is ready to raise its assessment of the economic outlook for the second month in a row.

Government ministers are expected to make assurances when they review the outlook on 10 April that the economy is now bottoming out due to improved exports and more-favourable output figures.

The improvement could prove a mixed blessing for Koizumi and his reforms, say analysts, as any signs of an upturn will strengthen the arm of his critics who are opposed to his tough reform measures.

Buyers of retailing stocks saw only good news in the economic improvement and swooped on chain stores. The locallyquoted 7-Eleven group jumped almost 2%, while shares in the third-largest retail chain, Aeon Group, added more than 2%.

Recently-strong computer-related stocks dropped following further profit warnings from software houses in the US. Shares in chip-testing apparatus giant Advantest lost more than 1%, while Nikon, which in addition to cameras supplies chip production equipment dived almost 4%.

Technology stocks in Hong Kong, South Korea and Taiwan were spared the effects of the fallout as their markets were closed for traditional grave-sweeping day, but Singapore stocks held steady after the government indicated it would cut taxes. The Straits Times index rose 1.8 points to 1780, led by a sharp climb in Singapore Airlines on hopes that US initiatives to bring peace to the Middle East would limit oil price rises.

Sydney's trades were cheered by comments from Reserve Bank of Australia Governor Ian Macfarlane that there was no rush to raise interest rates, and the All Ordinaries index rose 17.3 points to 3340.2.

News Corporation began to struggle back from recent losses which have taken the stock down 15%, and the shares rose almost 4% today as analysts reported that the damage had gone too far.

Resource stocks tottered on expectations that an outbreak of peace in Palestine would limit rises in the price of oil and other commodities, but banks rose on the calmer outlook for interest rates.

In Thailand stocks were firm on continuing signs of economic recovery and the SET index added 6.87 points to 368.82.

Malaysia's Composite index was up 5.9 points at 758.31, and in Indonesia a stronger rupiah helped Jakarta's Composite index add 4.85 points to 507.35.

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