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Asian Markets Update: Nikkei Slips on Weaker Economic Data

Key Japanese indices were mixed, however, as buying in software, transportation offset selling.

TOKYO -- Tokyo market players all seemed to be going in different directions Thursday, as buying in software and transportation shares countered selling on weak economic data.


Nikkei 225

index shed 99.41 to close at 16,300.46, while the


index, which includes all shares listed on the

Tokyo Stock Exchange's

first section, gained 2.05 to stand at 1486.29. The


small-cap index lost 0.32 to finish at 80.15, while the Nikkei


index shed 3.52 to end the day at 1692.52.


Ministry of Finance

released capital spending figures this morning that signaled a slowdown in corporate spending patterns. For the second quarter, spending rose 2.2% from the same time the previous year, but declined from the 3.3% jump seen the previous quarter. Many experts had predicted a significant rise in spending patterns but nonmanufacturers were reluctant to shell out any more cash, the survey revealed.

"Today's numbers will have a reassuring impact for bond investors because they show once again that the economy's overall pace of improvement will still be disappointingly slow," noted Noboru Kawai, strategist at

Morgan Stanley Dean Witter


The weaker figures came ahead of Monday's release of second-quarter gross domestic product, which is expected to show a paltry 0.9% growth.

Meanwhile, fund managers largely ignored the data to concentrate buying shares of firms that are expected to post large profits for the fiscal half ending in September. Among the favorites were

NEC Soft

, up 1150 yen, or 7.2%, to 17,050 ($160.36), and

Yamato Transport

, up 135, or 5.5%, to 2575.

Following the

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slide overnight, most large-cap technology shares were near flat to lower, including



, up 10 to 11340,


, down 85, or 2.9%, to 2885, and


, down 90, or 3.0%, to 2950. Traders also said that investors were unwinding cross-shareholdings in the latter two stocks as well.

The greenback inched slightly higher against the yen recently to fetch 106.32.

Hong Kong's

Hang Seng

index dipped 173.28, or 1.0%, to close at 17,431.95, largely on investor disappointment with the share placement of

. The firm said it would place up to 60 million shares at HK$5.08 each with an option to see up to 15.8 million additional shares at the same price. With shares closing down HK$0.65, or 11.2%, at 5.15 ($0.66) today, investors wondered why the firm decided to place shares at such a discount.

Some light profit-taking hit property and telecom firms as well, with

Cheung Kong

closing down 0.50 to 103.00 and

China Mobile

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down 0.50 to 62.25.

Broad selling in shares of chip makers hit Korean and Taiwanese markets hard, with Seoul's


index dropping 20.32, or 3.0%, to close at 656.37, and Taipei's


index sliding 179.85, or 2.4%, to a finish of 7430.93.