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Asian Markets Update: Japanese Tech Stocks Unshaken by Microsoft Worries

But blue-chips fall again as foreign managers struggle to adjust to the new Nikkei 225.

TOKYO -- The jitters over

Microsoft

(MSFT) - Get Microsoft Corporation Report

that managed to shake up the

Nasdaq Composite

failed to frighten off investors in Japanese tech stocks, as the effect on blue-chips of the newly-constituted

Nikkei 225

index continued to be the big story.

Japanese equities fluctuated in and out of positive territory all day as the key index closed lower, with the volatility largely caused by foreign investors who were slow to adjust their portfolios after the changes to the Nikkei 225 -- which took effect Monday -- were announced last week.

The Nikkei 225 shed 207.82 points, or 1.1%, to 18,272.33, while the

Topix

index, which includes all shares listed on the

Tokyo Stock Exchange's

first section, gained 4.47 to 1665.28. The

Jasdaq

small-cap index rose 3.02, or 3.4%, to 91.46, while the Nikkei

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over-the-counter

index climbed 27.45, or 1.4%, to 1922.75.

Many domestic fund managers with index-tracking funds were reportedly done raising cash in order to buy the new 30 stocks now part of the Nikkei 225 index, but foreign investors were not: "A lot of our customers are so busy with what is going on in the U.S., many are definitely behind readjusting to the new index," said one trader at a U.S. house here. "We're seeing a lot of hedge funds selling Nikkei 225 futures at the open and close, which explains why the contract keeps closing down when the cash market continues to see bids."

The June

Nikkei 225 futures

contract, which trades on the

Osaka Stock Exchange

, shed 310.00 points, or 1.7%, to 18,170.00, while

Topix futures

fell 12.50 to 1649.50.

The launch of several blue-chip oriented mutual funds later this week helped provide a solid base for the cash market, traders said. Tech shares were mixed, with

Sony

(SNE) - Get Sony Corp. Report

gaining 80 yen to 12,700;

NEC

(NIPNY)

climbing 125, or 4.5%, to 2920; and

Kyocera

(KYO)

jumping 1250, or 7.3% to 18,430.

Toshiba

slipped 31, or 3.0%, to 996.

Shares of

Hikari Tsushin

are ask-only at 17,800 a day after earnings were released. Although shares traded for the first time yesterday, as the firm announced plans to restructure, investor confidence in Hikari looks to be shot. The company said it would announce more reform plans by August.

The Hikari bashing didn't deter other key Internet and software providers in gaining ground, however.

Japan Oracle

jumped 6000, or 8.8%, to 74,500 and

Yahoo! Japan

climbed 5 million, or 10.7%, to 51.95 million. Softbank closed at 21,100 after its 3-for-1 stock split today.

In currency dealings, the greenback was a bit weaker, fetching 105.28.

Tech worries were pushed aside in Hong Kong as the

Hang Seng

index, up 12.87 to 15,380.01, fluctuated before and after today's government land auction. Some of the auctioned properties were bid at the low end of expectations, sending

Sun Hung Kai Properties

(SUHJY)

down HK$0.25 to 60.75, while

Cheung Kong

fell 0.50 to 86.75.

Telco and Internet plays were generally lower, with

China Telecom

(CHL) - Get China Mobile Ltd. Report

down 0.25 to 56.25, and

Pacific Century CyberWorks

down 0.40, or 2.9%, to 13.60.

Korea's

Kospi

index shed 10.38, or 1.4%, to 737.20, while Taiwan's

TWSE

index rose 113.03, or 1.3%, to 8921.12. Indonesia's

JSX

index was down 11.237, or 2.1%, at 519.612 as

President Wahid

fired two economic ministers in a surprise cabinet shuffle.