Asian Markets Update: Nikkei Reshuffle Wallops Tokyo Markets - TheStreet

TOKYO -- Despite strong economic numbers, Tokyo shares closed lower amid news of an index reshuffling that had investors scrambling to adjust portfolios.

The key

Nikkei 225

index shed 370.65, or 2.3%, to close at 16,130.90, while the

Topix

index, which includes all shares listed on the

Tokyo Stock Exchange's

first section, lost 32.61, or 2.2%, to finish at 1477.27. The

Jasdaq

small-cap index fell 1.36, or 1.7%, to stand at 79.33, while the Nikkei

over-the-counter

index lost 26.05, or 1.5%, to close at 1674.42.

Much to economists' surprise, Japan's second-quarter

gross domestic product

rose 1.0% from the previous quarter. Many experts had thought the GDP would show a 0.8% growth, but a slight increase in consumer and corporate spending between April and July lifted overall numbers.

Buoyant GDP figures were brushed aside, however, as investors digested news that the components of the Nikkei 225 index would

change on Sept. 22. Although many of the outgoing components, including telco

KDD

, down 230 yen, or 2.7%, to 8220 ($77.39), were sold, many dealers were scrambling to cover the bets they had made weeks ago.

Many traders had bought shares of

Credit Saison

,

Yamato Transport

,

Fujisawa Pharmaceutical

and

Taisho Pharmaceutical

on hopes that these firms would be included in the index. Because they weren't, their shares took a beating. Credit Saison fell 400, or 14.3%, to 2400; Yamato Transport lost 105, or 4.0%, to 2495; Fujisawa shed 230, or 5.7%, to 3800; and Taisho lost 260, or 7.9%, to 3050.

Large-cap tech shares were also lower, with

NEC

(NIPNY)

sliding 40, or 1.4%, to 2860, while

Fujitsu

lost 55, or 1.9%, to 2870.

Despite the strong GDP figure, the greenback inched higher against the yen recently to fetch 106.21.

Hong Kong's Hang Seng index declined 267.47, or 1.6%, to close at 17,007.98 as shares of

Pacific Cyberworks

(PCW)

continued to be punished by investors. Some players seemed to be worried about when

Cable & Wireless PLC

will sell the 2.1 billion PCCW shares it currently owns since the merger between Cable & Wireless HKT and PCCW closed last month. In addition, traders noted that the collapse of a joint venture with Taiwan's

GigaMedia

is also hurting sentiment. Shares closed down HK$0.50, or 3.8%, at 12.70 ($1.63).

Telecom shares didn't do any better, with

China Mobile

(CHL) - Get Report

shedding 1.75, or 2.9%, to 59.50.

Elsewhere in Asia, Korea's

Kospi

index lost 2.69 to close at 653.68, while Taiwan's

TWSE

index shed 32.79 to 7335.20.