HONG KONG -- Stocks fell in Asia under the influence of continuing bearishness on Wall Street, but in Korea the fall was steeper and more ominous: The leading index plunged by more than 6%, on worries over the solvency of two members of the giant


conglomerate, or



Japan's key

Nikkei 225

index fell 239.68 points, or 1.5%, to 16,008.14, while the


index, which includes all shares listed on the

Tokyo Stock Exchange's

first section, fell 5.18 to 1518.78. The


small-cap index gained 0.98 or 1.2%, to 81.53, while the Nikkei


index shed 9.17, or 0.5%, to 1701.95.


(SNE) - Get Report

was down 400 yen, or 4%, to 9,680. Internet investor


which was due to report its earnings later Friday, was up 2000 or 12.4% to 18,100.

Nippon Telegraph & Telephone


rose 20,000 or 1.6% to 1.29 million, and



was down 70 or 0.4% to 16,120.

As stocks fell, so did the shares of the companies that underwrite and trade them, partly because of

Merrill Lynch's

downgrade of

Goldman Sachs

(GS) - Get Report

on Thursday, which caused Goldman shares to drop 8.8%.

Daiwa Securities


fell 57 or 4.5% at 1213, and

Nomura Securities


fell 120, or 5.2% to 2,200.

Sentiment may also have been hurt by the admission of a Japanese government official that unfavorable data had been purposely excluded in calculating a recent estimate of Japan's Gross Domestic Product. After yesterday's official denial of a

New York Times

report that this had been the case, the top official at the

Economic Planning Agency

said Friday that the agency decided not to use revised investment data in compiling a revised 4th quarter GDP figure this month, and instead had used more encouraging preliminary data. The official,

Taichi Sakaiya,

said that political motives had played no part in the decision over which set of data to use.

South Korea's


index plunged 42.87 points or 6.1%, to 656.66, on worries about a possible financial crunch at the Hyundai group.

Hyundai Engineering and Construction

plunged 565 won, or 15% to 3205, and

Hyundai Merchant Marine

fell 740 or 15% to 4205. The steep drops came after the Yonhap News Agency quoted the head of one of Hyundai's major creditor banks, the

Korean Exchange Bank,

as saying the two Hyundai firms are having "short-term liquidity problems." Part of the bullishness over Korea this year has been based on the assumption that the big industrial groups in Korea are restructuring by selling off or closing non-productive assets, because they can no longer count on politically-motivated credit from banks.

Samsung Electronics fell 20,000 won, or 6.7%, to 280,000.

SK Telecom

(SKM) - Get Report

fell 10,000 or 2.8% to 345,000, while

Pohang Iron & Steel

(PKX) - Get Report

fell 2700 or 3.1% to 84,500.

In Hong Kong, stocks fell on the weakness in the U.S. market, with investors in the territory particularly sensitive to the likelihood of higher U.S. interest rates. Since Hong Kong's currency is linked to the U.S. dollar, rate changes in the U.S. are usually mirrored in Hong Kong immediately. The benchmark

Hang Seng

index fell 198.36 points, or 1.4% to 13,722.70.

Hutchison Whampoa


fell HK$4.00, or 4.7%, to 82.00, while its parent

Cheung Kong


fell 2, or 2.8%, to 70.50.

China Telecom

(CHL) - Get Report

fell 0.20, or 0.4%, to 48.80.

Internet investor and content company

Pacific Century CyberWorks

was down 0.15, or 1.1%, to 13.40, a day after announcing details of its offer to take over

Cable & Wireless HKT


, which fell 0.50, or 2.9%, to 16.80. In the announcement, PCCW said that upon completion of the merger, it would have debts of $31 billion, but that these would be reduced to $5-6 billion. The merged company would count on several subsequent asset sales to help reduce debt, according to

PCCW's vice-chairman, Francis Yuen.

Adding to any doubts about the viability of the new business was a statement by

HKT's independent financial adviser, ING Barings,

, which said "there can be no assurance ... that the combined group's operating cash flow will improve sufficiently or that the combined group will be able to satisfy the required conditions to enable it to obtain funds under its existing facilities." PCCW has yet to conduct any actual Internet business, having garnered most of its publicity until now based on its flurry of acquisitions, many of which have been paid for with stock.



index rose 121.36 points, or 1.4% to 8559.46.

In currency trading, the dollar at first gained on the yen after Japan confirmed that its GDP data might have been more optimistic than it should have been. But then the dollar gave up those gains, and was recently trading around the same levels as Thursday, fetching 107.335 yen.