Sunday September 17 11:00 PM ET Hard Times Seen Ahead for Asia as Stocks Skid on Wall St Losses

By Edwin Chan

SINGAPORE (Reuters) - South Korean (news - web sites) stocks caved in from the opening bell on Monday and other major Asian stock markets skidded following losses on Wall Street. Technology stocks were particularly hard hit following Nasdaq's slide on Friday.

Seoul stocks plunged by nearly eight percent at one point, hammered by the collapsed sale of debt-ridden Daewoo Motor, heavy selling of Samsung Electronics -- prompted by weakening computer chip prices -- and U.S. losses on Friday.

South Korea's KOSPI was down 7.04 percent to 583.97 by 0215 GMT.

In Tokyo, the benchmark Nikkei average fell 204.49 points or 1.26 percent to 16,008.79 by midday with tech stocks taking a heavy beating following the Nasdaq selloff.

The technology-weighted index ended about two percent lower on Friday after software maker Oracle Corp posted disappointing sales.

The Dow Jones Industrial Average slid 1.45 percent on Friday to end at 10,927.00, its lowest close since August 10, as surging oil prices pummelled blue chips.

Global markets have been on edge in recent weeks as surging oil prices raised the spectre of weaker profits and further hikes in interest rates if inflationary pressures build. Oil prices eased in early Asian trade on Monday after hitting a post-Gulf War high of $36 a barrel last week after OPEC (news - web sites) said it may pump more oil to calm surging prices. At 0120 GMT New York October light crude futures last traded at $35.59, down 33 cts from Friday.

Traders said Japanese market was also weighed down by institutional investors' last-minute efforts to take profits and pad their accounts ahead of next week's first-half book closing.

Taiwan, Australia Battered

Taiwan stocks slipped below the 7,000-point psychological support level minutes after the open as bearish investors dumped shares amid rising margin calls and worries over corporate health. Investors are concerned a spate of cash flow problems involving traditional industries could spark a new round of financial crisis.

The TAIEX slid 1.17 percent to 6,970.94 by 0220 GMT.

A fall in heavily weighted News Corp sparked heavy losses in Australian shares. The S&P/ASX 200 was down 1.4 percent at 3,281.9 by 0220 GMT.

Hong Kong stocks opened sharply lower. The Hang Seng Index was down three percent to 15,755.96 by 0230 GMT. Singapore's Straits Times Index also headed south from the outset, shedding 1.11 percent at one point. At 0220 GMT it was down 0.77 percent at 2,037.92.

Bad Times Ahead

Some analysts pointed out that Asia was facing a tough spell ahead with technical charts showing most of regional markets caught in their worst downward spiral in two years.

All of emerging Asia's eight major equity indices from Singapore to South Korea are in the red for the year and adrift below their 200-day moving averages -- a key bear market signal.

``We're starting to see some realism coming back into valuations in Asia,'' said Paul Chanin, vice president of regional strategy research at Salomon Smith Barney.

``In Korea particularly, markets have fallen because of disappointment with the pace of reform coupled with a reassessment of valuations in the technology sector,'' he said.

A potpourri of negative factors continue to dog Asian stocks, including heavy corporate debt, sluggish reform and torpid earnings growth exacerbated by recent high oil prices.

``I think you're going to get a slew of bad earnings coming through in 2001 and a sharp downward correction, mostly in Korea and Taiwan,'' said Sean Darby, Dresdner Kleinwort Benson's Asian equity strategist.

http://dailynews.yahoo.com/h/nm/20000917/bs/markets_asia_dc_28.html

-- Carl Jenkins (Somewherepress@aol.com), September 18, 2000

Answers

Nothing like getting the bad news early. Thanks, Carl, for the heads-up.

-- JackW (jpayne@webtv.net), September 18, 2000.

Tomorrow's news today. Yes, it looks like Asia's collapsing currencies - e.g. Australia and South Korea particularly - are about to match the demise of the Euro. How can these clues lead to anything other than stock market collapses? Avoidance would be a miracle.

-- Wellesley (wellesley@freeport.net), September 18, 2000.

When you combine all this bad news, about the Asian stock markets, with the European turmoil of recent weeks, plus the oil crisis, the future does look rather bleak, doesn't it?

-- LillyLP (lillyLP@aol.com), September 18, 2000.

Rising margin calls - those are the words that jumped out at me in the description of the Taiwan situation.

What does that remind you of?

-- RogerT (rogerT@c-zone.net), September 18, 2000.

The 3% drop in the Hong Kong Index, on top of their 6% drop last week, is starting to really add up. They and Singapore are the two strongest economies in Asia.

-- Uncle Fred (dogboy45@bigfoot.com), September 18, 2000.

Aw. come on now. The same thing happened in Asia two years ago. Ol' Alan Greenspan'll fix it.

-- Buck (bigbuck@trailways.net), September 18, 2000.

What surprises me is how Japan seems to be holding up through all of this.

Wasn't it just six months or so ago that they were piling up corporate bankruptcies at a horrendous rate?

-- QMan (qman@c-zone.net), September 18, 2000.