Asian Markets Update: Tokyo Investors Wait on Sidelines

Concerns about electronics-maker earnings and corporate bankruptcy have killed enthusiasm.

Author:: Kaya Laterman
Publish date:: Jul 21, 2000 6:37 AM EDT

Concerns about electronics-maker earnings and corporate bankruptcy have killed enthusiasm.

TOKYO -- Shares of Japanese electronic makers hit a snag a week before their first-quarter earnings results will be released, hurting the rest of the market -- which was already depressed about recent corporate failures.

The

Nikkei 225

index shed 172.08, or 1.0%, to close at 16,811.49, while the

Topix

index, which includes all shares listed on the

Tokyo Stock Exchange's

first section, lost 16.24, or 1.1%, to 1523.43. The

Jasdaq

small-cap index fell 0.24 to 82.16, while the Nikkei

over-the-counter

index ended the day 2.00 lower to 1705.96.

Investors, many of whom are fearful of more bankruptcies in the retail and construction sectors, have stayed on the sidelines for the past month, making the market very illiquid, traders lament. With fears of an interest rate rise as early as mid-August, lethargic trading may continue from some time.

The focus was on electronics makers Friday, as a slew of first-quarter earnings reports are scheduled to hit the market next week. Analysts said they are not expecting stellar numbers to emerge from firms like

Sony

(SNE) - Get Report

, which will release numbers Wednesday. Sony pulled shares down 270 yen, or 2.5%, to 10,680 ($98.40).

Hitachi

(HIT)

lost 26, or 1.9%, to 1319, while

Advantest

shed 90 to 21,400.

Softbank

lost 260, or 2.2%, to 11,840 after local reports said Japan's tax authorities were questioning president Masayoshi Son on suspicion that he failed to report about $830,000 in taxable benefits.

Bucking the trend were

Tokyo Electron

, up 40 to 14,790, and

Hikari Tsushin

, up 830, or 16.1%, to 6000. Investors are hoping Hikari will announce a comprehensive restructuring plan soon.

With dealers worried about the long-term economic scenario in Japan due to bankruptcy fears, the greenback edged higher against the yen, lately fetching 108.54.

A rather

upbeat speech on the likelihood of a soft-landing economic scenario by U.S.

Federal Reserve

Chairman

Alan Greenspan

overnight helped Hong Kong's

Hang Seng

index close up 162.35 at 17,920.86. Property and bank shares powered the market higher, including

Cheung Kong

, up HK$2.00, or 2.0%, to 101.00 ($12.95) and

Sun Hung Kai Properties

(SUHJY)