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War Fears Drive Down Major Asian Stocks - 2003-01-24

War fears have continued to make stock investors in Asia jittery this week, driving major stock markets down Friday.

The Iraq factor remained high on investors' minds in Asia this week. Analysts say investors are shying away from potentially war-sensitive stocks and some economists say companies exporting to the United States might be vulnerable.

Across the region, investors bought shares in non-export sectors such as banking and finance.

Technology stocks in Taiwan lost ground Friday despite encouraging earnings news overnight from U.S. computer giant Texas Instruments. The world's largest chipmaker, TSMC, fell more than two percent, while its rival United Microelectronics dropped 1.8 percent. The TAIEX closed flat Friday at 5,000, but still three percent higher than last week.

South Korea's KOSPI was hurt by war talk and the crisis on the Korean peninsula. The index tumbled 2.5 percent to 609 Friday, the lowest close in three months. Investors sold shares in telecoms and electronics.

Concerns over a strengthening yen triggered selling in Japanese exporters. Honda Motors, Japan's largest auto maker, dropped nearly two percent. The Nikkei 225 index was down more than half a percentage point to close at 8,726. The index was slightly up from a week ago.

Thailand's SET index rallied during the week after the release of strong bank and construction outlooks. It was up nearly three percent from last Friday.

Pat Pattaphongse, head of research at KGI Securities in Bangkok, says a strong flow of foreign capital is coming into the Thai stock market after it proved itself one of the best performers in Asia last year. "Within the Asian sphere," he said, "Thailand stands out as a country which is showing strong economic growth. And on top of that you're looking at valuations, which are basically bottom of the range [cheap] in the region."

Hong Kong's Hang Seng index closed Friday nearly 1.5 percent lower, after a sell-off in telecom stocks. The index lost 1.5 percent since last Friday, closing the week at 9,460.