Accessibility links

Argentina Concerns Push Asia Stocks Lower - 2001-12-21

Concern about Argentina's financial crisis and fears that computer related industries will not recover as quickly as expected pushed Asian stock indexes lower as trading wound down for the week.

Shares of chipmakers in Taiwan and semiconductor equipment makers in Japan plunged after a sell off on Wall Street Thursday. The Nikkei closed lower by one percent, while Taiwan's stock index fell more than 3 percent.

In Hong Kong, the trading week ended on a sour note with HSBC Holdings driving down the Hang Seng index on concerns that Argentina's economic collapse would hurt the bank's business in Latin America. The Hang Seng sank almost four percent Friday.

In what is being billed as a world first, Singapore and Australia linked their stock exchanges, allowing cross-border trading in 50 top stocks in each market. But institutional investors gave it a lukewarm reception, and fund managers say they are still not clear on how it all works.

In the currency markets, the Japanese yen continued to fall against the U.S. dollar and the euro, with little intervention from the Ministry of Finance. The yen hit 129.55 to the dollar in Tokyo trading Friday.

Keio University Professor Eisuke Sakakibara, known as "Mr. Yen" when he was a vice-minister at the Finance Ministry, endorsed the falling yen in an interview with TV Tokyo. "Japan has to carry out structural reform. And we have to keep in mind that by doing this, there will be, for a period of time, a further damage to our economy," he said. "The process will make the yen even weaker, which is natural. I think, the yen should become weaker for the sake of our economy."

The yen has lost 3.5 percent against the U.S. currency since the beginning of the month. Mr. Sakakibara and others are predicting the yen could fall as low as 140 to the dollar in coming months.