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Fall of Iraqi Regime Fails to Lift Asian Markets - 2003-04-11

The fall from power of Iraqi leader Saddam Hussein earlier this week failed to lift Asian stock markets, as a potentially deadly respiratory virus continued to disrupt economies and make investors nervous across the region.

Analysts are raising alarm over the impact of Severe Acute Respiratory Syndrome, or SARS, on businesses in Asia.

Investors are selling SARS-sensitive stocks such as transport companies, hotels and insurance companies. Travel to and within the region has fallen dramatically since the outbreak of the disease, and health insurance companies are facing increased claims.

Hong Kong's Cathay Pacific Airways, which has cut 37 percent of its weekly flights since the start of the outbreak, issued its first-ever profit warning Friday. Cathay said profit would fall. Its stock plunged to a 15-month low shortly after the news.

Paul Coughlin, Hong Kong-based managing director of the U.S. credit rating agency, Standard & Poor's, said "companies that have significant exposure to transport and tourism are obviously feeling the pinch… They stand out as companies most affected particularly if this problem turns out to be an extended problem."

Despite Cathay's problems, the Hang Seng index managed a small gain on Friday, ending the day at 8,645, but it was two percent lower for the week.

The fall from power in Baghdad barely moved stocks in Tokyo, where worries over instability on the Korean Peninsula dampened trading this week. A warning by North Korea that Japan is within striking range of North Korea's military, helped push the Nikkei 225 Average to a fresh 20-year low Friday. The Nikkei ended the week down, at 7,816.

Some South Korean financial stocks rallied Friday leading the KOSPI to close 4.5 percent up for the week at 582.

In Taiwan, the index slid nearly a quarter of a percent for the day, to close at 4,530, but the market was more than half a percent higher than last Friday.

Australia's S&P/ASX 500 also closed the week more than half a percent higher, at 2,949.