Pundits and punters at odds

PUNDITS were pushing Asian stock markets today, but punters were not so sure. As a clutch of investment banks put the region on the buy list, investors were busy selling stocks in most major markets.

Doubt about the strength of the technology recovery left Japanese electronics stocks mixed, and the Nikkei 225 Average was down 125.55 points at 10,538.43 at the close, while Hong Kong's Hang Seng index tumbled 2.25%, pulled into a black hole created by plunging stocks of China's mobile phone plays.

As the indices dived, analysts from ING Barings and Salomon Smith Barney predicted Asian markets would outperform this year, and advised clients to wade in. Tim Condon, chief economist for ING Barings, forecast growth of 4.9% for Asia ex-Japan in 2002, and the bank predicted that the liquidity washing around the region was a positive force for stockmarket recovery.

Salomon advised under-weighting US stocks and raising exposure to Asia, which it said remained the leading play on a recovery in global trade, particularly Hong Kong, China and South Korea.

No strategist was picking Japan, as the country's internal woes continued to worsen. The spotlight switched from the banks to retailers after government figures showed that household spending continued to slide in November. Stocks in Fast Retailing, a top clothing chain, languished after plunging 15% yesterday on an earnings warning. Other big retailers followed.

The recent benign yen effect faded as investors fretted that foreign institutions would unload Japanese stocks to avoid long-term currency losses, and favourites such as Canon slid almost 5%.

Wall Street's sluggish overnight performance deterred investors in Hong Kong, leaving the market at the mercy of sellers of China Mobile and China Unicom. The cellphone twins crashed a further 5% on fears of increased competition in their mainland market, dragging the Hang Seng index down 257.66 points to 11,183.06. HSBC shares, a favourite of ING Barings but a sell according to Salomon, dropped HK$1.50 to HK$90 on revived fears of the Argentinian fallout, although less than 1% of the bank's assets are tied up in the country.

South Korea lost its ability to levitate as fears that the weak yen will hit exports dampened sentiment, and the Kospi fell 23.28 points to 728.23. Car giant Hyundai, a possible casualty of hotter Japanese competition, crashed 5%, and for once technology stocks failed to come to the rescue.

Taiwan investors continued to support their semiconductor sector after strong chip sales in December, and the Weighted Average advanced 11.65 to 5877.19. Singapore bought the economic recovery story and the Straits Times index rose 29.3 points to 1715.5, led by electronics counters.

Forecasts of higher base-metal prices lifted resource stocks in Australia, but switching out of blue-chips left the All Ordinaries index down 3.1 points at 3351.8 at the close. As the AngloGold bid for Normandy approached tomorrow's deadline, the Australian mining stock climbed 2%.

Malaysian stocks remained in favour and the Kuala Lumpur Composite added 6.81 points to 707.28, while Thailand's SET index eased 2.03 to 17.21, and in Indonesia, the Jakarta Composite put on 2.47 points to 393.97.

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