TOKYO -- Most Asian markets cooled off Wednesday as anxiety over a U.S. credit tightening mounted and as investors started to have second thoughts about the effect of the America Online (AOL) and Time Warner (TWX) merger.
index dropped 173.50 to 18,677.42, while the
index, consisting of shares listed on the
Tokyo Stock Exchange's
first section, slipped 21.90, or 1.3%, to 1656.92. The
small-cap index inched 0.15 higher to 96.44, while the
over-the-counter shares slipped 8.07 to 2243.89.
Tech and telecom shares were beaten down, with
, down 210, or 4.9%, to 4090 and
600, or 4.4% lower, to 13,200.
didn't fare any better, dropping 300, or 1.2%, to 25,400, while
closed down 95 points, or 4%, to 2310.
Although retail investors closely emulated overnight U.S. market movements, domestic mutual funds and foreign investors seemed to go in the opposite direction, picking up many of the tech shares and other blue-chips as prices got cheaper, traders said.
"It's getting very hard for an individual to get in on the action with tech shares, especially when the TSE halts trading on shares like Sony and Fujitsu every time orders aren't balanced. I'm beginning to think Sony is a U.S. stock, not Japanese," grumbled one player from a Japanese trading house.
The TSE halts trading of shares that hike or drop by 2,000 points until bids and offers roughly balance out. If offers outnumber bids, or vice versa, the exchange doles out an even amount of shares at the end of the session to securities firms so they can finish carrying out orders for their clients.
"I'm going to have to consider trading Sony ADRs if I ever want them in my portfolio," the trader added.
Bank shares were also weak, including the
Bank of Tokyo-Mitsubishi
, down 28, or 2%, to 1396, while
slipped 6, or 2%, to 300. Bank shares have fallen more than 30% since they peaked in mid-October, underperforming the Nikkei 225 index by 34%, according to
Lehman urged clients to jump back in on bank stocks. The firm upgraded
Dai-Ichi Kangyo Bank
to buy from neutral and maintained its buy rating for the Bank of Tokyo-Mitsubishi.
Amid the selling were two bright spots,
. A better-than-expected fourth-quarter pro forma earnings
in the U.S. helped shares climb 2.1 million, or by 2.2%, to 9.14 million. Just as in the U.S., traders said they expected Yahoo! Japan to top previous earnings and monthly traffic numbers but that wasn't all the market talked about.
Traders were in a tizzy when they heard
had more than doubled its 12-month target price on Yahoo! Japan's parent Softbank to 184,000. Goldman analyst Hiroshi Yamashina said shares in the Internet giant failed to factor in the value of unlisted companies Softbank currently owns.
"Softbank invests in U.S. Internet companies with the aim of using the returns and the expertise it acquires to develop business in Japan and Europe," Yamashina said in a report. He also said the firm's e-business experience and business model of acquiring a stake in almost every major player in the Internet sector justifies a share price premium of 100%.
Softbank closed up 5000, or 6.1%, to 86,000.
The dollar hovered around 106.00 yen today, pulled back and forth between Japanese exporters selling the dollar as it hiked above 106.00 yen, while U.S. hedge funds and Japanese pension and mutual funds were picking up the greenback at around 105.80 yen.
slipped 147.90 to 15,714.20 as investors actively hedged against higher bond yields at home and around the globe.
fell 1.750, or 1.8%, to 96.250.
Media shares, on the back of the America Online-Time Warner merger, helped
close up 0.130, or 7.8%, to 1.790.
Cable & Wireless HKT
, Hong Kong's only broadband Internet service provider, also closed 0.800, or 4.2%, higher to 19.950 as investors thought the firm would be a good contender for a merger. There were also vague rumors about a C&W share swap with an unnamed U.S. firm but the talk remains unconfirmed.
index finished up 17.86 to 2427.56, largely boosted by buying in
, up 0.110, or 15.4%, to 0.825.
index closed down 26.32, or 2.7%, to 955.01, while Taiwan's
index finished up 217.62, or 2.4%, to 9144.65.