Asian Markets Update: Economic Concerns Set Back Tokyo Stocks

TOKYO -- Worries over a slowing economic recovery set Japanese shares back once again Wednesday, with the Nikkei 225 index setting a fresh 18-month low.

The Nikkei 225 index shed 288.67, or 1.8%, to 15,639.95, while the Topix index, which includes all shares listed on the Tokyo Stock Exchange's first section, lost 25.41, or 1.7%, to 1448.11. The Jasdaq small-cap index fell 1.41, or 1.9%, to 74.63, while the Nikkei over-the-counter index lost 22.22, or 1.4%, to 1577.54.

Two major factors, both derived from economic concerns, depressed the market today. First, many foreign hedge funds were piling up short positions in the futures market, in anticipation that the Bank of Japan's tankan survey of corporate sentiment, set to be released next Tuesday, would show a nascent recovery amid small and mid-sized firms.

Nikkei 225 December futures closed down 270.00, or 1.7%, at 15,700.00, while Topix December futures fell 22.50, or 1.5%, to 1449.50.

In addition, large-cap technology shares took a beating today over fears that an economic slowdown in the U.S. would put a dent in corporate profits of Japanese electronic firms.

Sony (SNE Quote) fell 430 yen, or 3.6%, to 11,370 ($105.54), Fujitsu (FJTSY Quote) lost 135, or 5.0%, to 2550, while NEC (NIPNY Quote) shed 105, or 4.3%, to 2365. Fuji Photo Film also tumbled 290, or 7.7%, to 3490 after Kodak (EK Quote) chopped its profit outlook for the third quarter overnight.

Bucking the trend, however, was mobile giant NTT DoCoMo. The firm formerly announced its tie-up with America Online (AOL Quote) in the mobile-phone and personal-computer market. Shares closed up 60,000, or 2.0%, at 3.13 million.

The greenback barely budged against the yen and recently fetched 107.73.

Hong Kong's Hang Seng index gained 153.28, or 1.0%, to 15,444.13 after investors picked up major blue-chips as a safe-haven to volatile technology shares. Property shares were red hot, including Sun Hung Kai Properties (SUHJY Quote), up HK$2.00, or 3.0%, to 69.50 ($8.91), and Cheung Kong, up 1.00, or 1.1%, to 92.25.

After declining about 50% over the past two months, Pacific Century Cyberworks (PCW Quote) finally gained 0.35, or 4.1%, to 9.00, largely on a technical rebound. Although the firm's mobile-phone joint venture with Australia's Telstra still is under cloudy skies, some traders thought the firm may be clearing that issue up by Friday, quelling investor worries.

Telecom shares were mixed, with China Mobile (CHL Quote) down 0.75, or 1.5%, to 50.75, while Hutchison Whampoa rose 2.50, or 2.5%, to 103.50.

Elsewhere in Asia, Korea's Kospi index gained 1.71, or 2.0%, to 599.31, while Taiwan's TWSE index shed 31.99 to 6717.04.