Taiwan slides on referendum call

TAIWANESE shares crashed after a breast-beating speech by the country's president calling for a referendum on independence from China. As other Asian markets sank on last week's economic data from the US, Taiwan's Weighted Average index tumbled almost 6% to 4627.51, losing 293.38 points.

The biggest fall in the market since 11 September was triggered by the controversial speech on Saturday by president Chen Shui-bian. China's politicians, who regard Taiwan as an illegal breakaway state, warned that any move to declare independence would be disastrous for Taiwan. Any sign of pro-independence policies results in threats from China's leaders, often accompanied by military manoeuvres in the Taiwan Straits.

While few investors expected military action, and other Taiwanese ministers played down the significance of the remarks, there were fears that expanding business ties between the two countries might be threatened.

Shares in shipping giant Evergreen Marine fell 7% on concerns about the outlook for its burgeoning cross-Straits business. Computer components maker Hon Hai Precision, which sources most of its production in China, fell 6.5%.

A mid-morning rally in Tokyo fizzled out under the weight of earnings concerns. At the close, the Nikkei 225 Average was off 4.73 points at 9704.93.

Uniqlo stores group Fast Retailing tumbled almost 4% on reports that sluggish sales will drive profits well below the company's forecasts. July sales in Japan slumped 40%, marking 10 months of continuous decline by the group, which is building up a chain of stores in Britain. A bid to boost sagging sales by slashing prices toasted shares in the locally-quoted arm of McDonald's, and they fell almost 2% to their lowest level since the company floated 12 months ago.

Hong Kong's Hang Seng index continued to ease, falling 82.59 points to 9903.13 as investors dumped shares in exporters, and awaited half-year results from banking giant HSBC Holdings, which earns about half its profits in the territory. Traders were braced for grim news on bad loans as bankruptcies and credit card defaults continue to soar. Some analysts are forecasting a 21% drop in profits, the bank's shares crept up 0.25 cents to HK$85.50.

British reports that the 46% stake in Thistle Hotels held by Singapore's BIL International was in play sent shares in the investment group up more than 7%. Most other stocks were in retreat on US economic worries, and the Straits Times index dropped 23.92 points to 1485.97.

The dimming outlook for chip-makers pushed South Korea's Kospi index down 22.59 points to 678.09. Fears that the US is about to slide back into recession hit resource shares in Sydney, where the All Ordinaries index closed down 42.3 points at 2960.5. Among the heaviest losers was BHP Billiton, down 2%, while News Corporation was also under pressure, and tumbled 4%. Insurance giant AMP fell almost 2.5% following last week's downgrade by Standard & Poor's.

The regional weakness sent Malaysia's Kuala Lumpur Composite index down 0.43 to 719.1 while Thailand's SET index slid 37.4 points to 363.06. Indonesia's Jakarta Composite gave up 7.85 points at 448.47.

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.