TOKYO -- Trading slowed considerably in much of Asia on Thursday, as markets preferred to wait for the opening of the

European Central Bank

meeting, due to convene later in the day. Although tech shares remain market favorites, and roared ahead in Korea, a bout of profit taking ahead of the March 31 fiscal year end had all major indices in Tokyo closing lower.

The key

Nikkei 225

index fell 16.56 to 20,065.11 after reaching a new intraday record of 20,202.96, a level not seen since February 1997. The


index, which includes shares listed on the

Tokyo Stock Exchange's

first section, slid 6.76 to 1718.48. The


small-cap index dropped 3.66, or 2.9%, to 120.75, while Nikkei


shares fell 65.84, or 2.5%, to 2603.08.

Despite the solid performance in U.S. equities overnight, the market remained under pressure -- especially during the last half hour of trading -- as institutional investors and government-affiliated financial institutions continued to shed major cross-share holdings to book profits before the end of the fiscal year, March 31.

Sega Enterprises


fell sharply again, this time by 105, or 3.4%, to 2995 as expectations for brisk sales of rival


(SNE) - Get Report

PlayStation 2 game consoles engendered fears over Sega's own Dreamcast game business. Sega's parent



also dropped 740, or 7.8%, to 8700, while



slid 120, or 5.1%, to 2255. Large paper makers were also lower.

Retail investors are still favoring selected tech shares, with



rising 100, or 3.9%, to 2665 and


climbing 12, or 1.3%, to 949.

Oki Electric Industry

was up 43, or 5.8%, to 786, while Sony fell 300 to 32,300 after several sharp rises earlier this week.

After falling almost three yen overnight, the dollar saw some short-covering and buying from U.S. fund managers, and was trading recently around 107.33. The dollar stood around 0.975 vs. the euro ahead of the ECB meeting, which may raise European interest rates.

Hong Kong's

Hang Seng

index rose 93.22 to 16,936.81, largely held up by foreign investors buying

China Telecom

(CHL) - Get Report

. The company's shares rose 2.75, or 3.9%, to 72.75.

Short-sellers were still in the market for two stocks:

Pacific Century Cyberworks

, which this week clinched a deal to take control of

Cable & Wireless HKT


. Both shares fell sharply yesterday, the first trading day since the deal was announced. PCCW shares ended flat at 20.40, while C&W HKT slid another 0.50, or 2.2%, to 22.25.

Meanwhile, Hong Kong may get a credit rating boost from

Fitch IBCA

in the next couple of weeks, local reports said. Although deflation was still a concern, Fitch said it was mulling either hiking or maintaining Hong Kong's current A+ credit rating since unemployment rates were stabilizing.

Korea's Kospi index soared 66.28, or 8.0%, to 894.66 as retail investors couldn't get enough of tech shares.

SK Telecom

(SKM) - Get Report

rose 550,000, or 13.1%, to 4.75 million, while

Samsung Electronics

climbed 38,000, or 14.8%, to 294,000.