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Asian Tech Stocks Take a Hit - 2002-05-10


Asian markets ended down this week, after falls on Wall Street prompted investors in Asia to retreat. Tech stock saw the biggest losses.

In Tokyo, the Nikkei ended the week at 11,531, down 0.2 percent from last week's level. Technology shares of mobile phone giant DoCoMo were down 3.1 percent Friday, after two days of gains.

Mark Mathews, chief strategist at Standard and Poor's Asia operation, said that, while Japan's economic indicators are looking somewhat healthier than before, investors have few incentives to buy.

"Japan has now officially joined the camp of the Asian recovery story with Malaysia, Singapore, Taiwan and Korea, in registering a year-on-year increase in its exports. The problem is that stocks in Japan, particularly in the technology sector, are rather expensive, and I think that's why it's trading sideways right now," Mr. Mathews said.

In Seoul, the Kospi index ended the week at 817, almost five percent down on the week. Samsung electronics slid 7.7 percent Friday, hitting an eight-week low after USB Warburg cut Samsung's ratings from 'strong buy' to 'hold'.

Hyundai Motor also slid five percent on fears the company won't be able to match its first quarter profits.

Tech shares in Taiwan showed small gains on Friday, following midweek losses. The main Taiex share index, however, ended 1.7 percent down from last week, closing at 5,807.

In Hong Kong, a tumble in property shares led the Hang Seng index down to close 1.2 percent off from last Friday. Still, the index remains nearly 10 percent higher than a month ago.

Mr. Mathews said that, despite a recent pick up in property prices in Hong Kong, developers are still offering big discounts. "A sustainable recovery in property prices in Hong Kong, I don't think, is going to happen. If you don't see at least a little mild inflation in property, then I don't think the stock market rally is sustainable," he said.

Trading in Hong Kong was slow.

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