Terror fears shake Far East investors

THE carnage in Madrid - details of which came after the close of trade in most of Asia yesterday - knocked equities across the region today as investors' fears about terrorist threats were rekindled.

The falls were particularly evident in airline and exporting stocks although there was across-the-board selling. The declines mimicked losses on Wall Street and followed falls earlier in the week on concern over the strength of the American recovery.

The damage in Singapore was typical of a sell-down that came as a fuller picture of the Spanish bombings emerged.

Singapore Airlines sank 20 cents to S$11. The shares have back-pedalled from S$12.90 in November even as commercial prospects have improved. Also hurt was State- linked shipping group Neptune Orient Lines, which was shaved by two cents to S$1.96. Some fretted that volumes of shipped goods could be affected in the long run.

Banks also took a hit. DBS fell 20 cents to S$13.80, United Overseas Bank gave up 10 cents to S$13.70; and Oversea Chinese Banking Corp lost 30 cents to S$12.10 or 2.4%.

The Straits Times index declined 18.93 points to 1828.85, the day's reversal taking its losses this week to 3.3%.

The picture was much the same in Hong Kong and Tokyo. Cathay Pacific Airways, which this week turned in better-than-expected results, lost altitude, dropping 35 cents to HK$15.10. Its shares are down by more than HK$1.30 on the week.

Conglomerate Swire Pacific dipped HK$1 to HK$51. Global lender HSBC, the largest stock on the market, weakened by HK$1.50 to HK$118.50. The Hang Seng index slid 216.76 points to 12,807.3 although some brokers said a rebound could come next week if investors focused anew on the near certainty that growth and profits this year should be superior to those of last year.

'The economic recovery is across the board and the robust growth of exports, tourism and private consumption is well-expected,' say Citigroup analysts. The Hong Kong administration expects that gross domestic product will grow by a hefty 6% this year.

Japan's Nikkei 225 Average closed down 134.29 points at 11,162.75. Japan Air Lines shed 10 yen to 333, while All Nippon Airlines slid back 12 yen to 342.

Political developments in Seoul added to the bearish mix. The Composite index dived 27.54 points to 842.39 as legislators voted to pass an unprecedented bill to impeach President Roh Moo-hyun. Roh is accused of riding roughshod over election laws.

Roh's duties will be carried out for the time being by the country's prime minister, and a considerable period of uncertainty at the highest levels of government is expected as the drama is played out. Roh was just a year into a fiveyear term of office. The matter will now go to the South Korean courts.

In Sydney, National Australia Bank slipped 24 cents to A$31.60 after a damning report on events leading to its forex scandal saw five currency options dealers fired and major management changes in its trading division. The PricewaterhouseCoopers report found lax management and financial controls that allowed traders to conceal massive losses. The All Ordinaries index closed down 9.8 points at 3402.1.