Profit-takers push the Nikkei lower

MORE often than not Asia's markets - the younger siblings of the equity world - take their cue from their big brother, Wall Street. When the Dow, Nasdaq and Standard & Poor's track higher, most of the region, most of the time, follows cheerfully and obediently.

That benign linkage failed to be seen in parts of Asia today, however, despite robust earnings from a swathe of corporate America that drove US benchmarks to fresh multi-month highs.

Profit-taking was the principal theme as investors opted to lock in recent gains. But although Tokyo and some other markets slipped, dealers chose to view the setback as a healthy and minor consolidation rather than the start of something less edifying.

Undercut by those cashing in, the Nikkei 225 Average fell 66.48 to close at 10,899.95.

Banks, hot favourites on a domestic recovery story in recent months, bore the brunt of the selling.

Sumitomo Mitsui Financial, which has rocketed up from a lifetime low of 162,000 yen in the early days of April, slumped 28,000 yen or 4.3% to 630,000.

Sector peers Mizuho Financial fell 13,000 yen or 4% to 310,000 yen while UFJ gave up 19,000 yen or 3.3% to 550,000.

The same downward movement affected tech shares, despite the rosy picture that was painted overnight by Intel. The world's largest semiconductor maker said third-quarter net income had more than doubled as sales surged ahead of analysts' expectations.

Advantest, which makes chip-testing equipment, dipped 90 yen or 1.1% to 7,990, while Tokyo Electron traded at 7,950 yen, weaker by 90 yen or 1.1%. There was no respite for leading exporters either, amid continuing jitters about the direction of the yen.

President George Bush, who starts an Asian tour in Tokyo on Friday, made it abundantly clear overnight that currency concerns will feature prominently in his discussions. That could bring a still weaker dollar.

Office equipment maker Canon was clipped by 10 yen or 0.2% to to 5,490, tyre maker Bridgestone fell nine yen or 0.6% to 1,475 and Honda eased 80 yen or 1.8% to 4,400.

Sony, another major exporter, was 60 yen or 1.5% lighter at 3,930. Dealers said investors were beginning to wonder what they may hear from executives at a key corporate strategy briefing set for the final week of the month.

Foreign investors have, though, been consistently keen on Japanese equities so far this financial year, ploughing in a net £33bn since March, according to data collated by Reuters. And analysts say more overseas money is set roll in over the coming months.

Profiit-taking was also evident in South Korea's premier stock, Samsung Electronics. It fell 2000 won or 0.5% to 451,000 won. Investors have started to zero in on quarterly numbers due on Friday.

The Seoul Composite index traded level, up a single point at 767.52.

In Singapore shares showed more mettle, the Straits Times index gaining 10.78 points or 0.6% to 1741.51, led by property plays.

City Developments spurted 20 cents or 3.4% higher to $6.10, while Keppel Land rose by one cent or 0.6% to S$1.72.