Asian Markets Update: Stocks Slide in Quiet Trading

TOKYO -- Japanese shares continued their slow descent in quiet trading ahead of Tuesday's U.S.

Federal Open Market Committee

meeting, but as was the case last week, mutual fund managers picked tech stocks near the close to trim the day's losses.

Although the market had factored in a half percentage point interest-rate increase by the

Fed

, traders said they were worried about the statement to be issued by the Fed following the meeting, which could signal more interest-rate increases this year.

The key

Nikkei 225

index fell 44.17 points to 17,313.69, while the

Topix

index, which includes all shares listed on the

Tokyo Stock Exchange's

first section, shed 3.14 to 1627.35. The

Jasdaq

small-cap index lost 1.29, or 1.4%, to 93.17, while the Nikkei

over-the-counter

index fell 5.88 to 1963.07.

Former Prime Minister

Keizo Obuchi's

death over the weekend had little effect on the market. Obuchi, who was Japan's 84th premier, pushed through tough banking reforms and numerous economic stimulus packages during his 20 month-reign as the nation's leader. Obuchi died on Sunday afternoon after suffering a stroke six weeks ago.

Many domestic investors were switching out of tech shares and into cheap, domestic blue-chips in the food processing and construction sectors. Among large tech shares,

Kyocera

(KYO)

tumbled 700 yen, or 4.4%, to 15,200, and

Softbank

fell 1100, or 4.6%, to 22,900.

Sony

(SNE) - Get Report

rose 30 to 11,720,

Fujitsu

(FJTSY)

climbed 70, or 2.3%, to 3070, while

NEC

, which last Friday reported profit gains for fiscal 1999, jumped 70, or 2.6%, to 2810.

The game war is heating up but robust sales aren't being reflected in share prices.

Nintendo's

Game Boy Color pocket console knocked off Sony's PlayStation 2 as the best selling game console last week, marking the end to Sony's reign at the top since March 4. Still, Nintendo shares dropped 840, or 4.7%, to 16,980.

Short covering lifted the greenback slightly against the yen to around 108.69.

Hong Kong's

Hang Seng

index fell 230.64 points, or 1.5%, to 14,881.30 as trades slowed ahead of the FOMC.

Hutchison Whampoa

(HUWHY)

rose HK$0.50 to 107.00 after the market speculated the firm would bid for more third-generation mobile phone licenses in Europe, first targeting Sweden and then Holland, Denmark and Switzerland.

Internet portal

Tom.com

lost 0.05 to 6.75 after the firm said first-quarter losses totaled $45.4 million, slightly better than the $50 million or more expected by the market.

China Telecom

(CHL) - Get Report

lost 1.25, or 2.2%, to 56.50.

Korea's

Kospi

index shed 11.63 points, or 1.6%, to 728.67, as investors worried about foreigners leaving the market if the U.S. economy cools down.