- The Washington Times - Tuesday, February 11, 2003

HONG KONG, Feb. 11 (UPI) — Stock prices ended slightly lower in lackluster trading on the Hong Kong Stock Exchange Tuesday, pressured by weakness in the banking sector.

Markets in Tokyo were closed for a national holiday. Trading will resume on Wednesday with the blue-chip Nikkei Stock Average hovering around 8,484.93 after rising 36.77 points on Monday.

Hong Kong's blue-chip Hang Seng Index, which rose 81.19 points in the previous session, slipped 37.23 points, or 0.4 percent, to 9,194.91.

Analysts said stocks opened higher after Wall Street rose on Monday but investors continued to take profits fearing financial markets will remain under pressure in the build-up to a possible war in Iraq.

Stocks slipped late in the session on disappointing earnings from Bank of East Asia and continued concerns about telecom operator PCCW Ltd's business strategy exacerbating cautious sentiment.

Bank of East Asia dropped 4.8 percent after reporting a 19 percent decline in its 2002 net profit. PCCW lost 0.8 percent, still being punished for confusing investors last week by denying, then confirming, its takeover approach to British telecoms carrier Cable & Wireless Plc.

Global fashion retailer Esprit Holdings rose 1.7 percent on expectations that it will report net profit grew by 28 percent for the six months through December. The company will post its first-half results on Wednesday.

Meanwhile, HSBC Holdings slipped 0.6 percent, its domestic subsidiary Hang Seng Bank lost 1.8 percent and Bank of China Hong Kong eased 0.6 percent.

Elsewhere in Asia, prices ended slightly lower in moderate trading on the South Korean Stock Exchange. The Korean Composite Stock Price Index, or Kospi, which eased 0.23 points during the previous session, slipped 1.27 points, or 0.2 percent, to 575.98.

Analysts said stocks came under pressured after rating agency Moody's Investor Services downgraded its outlook on the country from positive to negative. South Korea's ratings now stand at A3 for the government's domestic and foreign currency denominated obligations.

The rating agency said that increased uncertainty regarding North Korean actions and possible responses from the international community have reduced the likelihood that South Korea's ratings could move up in the near future.

"North Korea's eviction of inspectors from the United Nations' International Atomic Energy Agency, renunciation of its Nuclear Nonproliferation Treaty obligations, and reactivation of the Yongbyon nuclear plant are, taken together, actions more provocative than past moves or threats," Moody's said.

Moody's also said that the rating could be lowered if the Korean peninsula's security environment further deteriorates.

Separately, Moody's also placed negative outlook for the A3 foreign currency rating for Korea Electric Power as the firm is directly and indirectly 53.9 percent owned by the Korean Government.

In trading, following the Moody's move, KEPCO dropped 1.9 percent. Posco lost 0.4 percent and KT Corp. slipped 0.7 percent.

Prices ended higher on the Singapore Stock Exchange in moderate re-holiday trading, snapping their four day losing streak. The Straits Times Index, which slipped 2.68 points during the previous session, rose 13.24 points, or 1 percent, to 1,295.97, supported by some bargain hunting.

Markets in Singapore will be closed on Wednesday for the national holiday. Trading will resume on Thursday.

In trading, Singapore Airlines jumped 4.7 percent as oil prices fell on back of easing fears of an early war in the Middle East.

Meanwhile, prices ended lower on the Taiwan Stock Exchange in moderate trading. The key Weighted Index, which sank 91.50 points during its previous session, lost another 24.89 points, or 0.5 percent, to 4,618.98.

China Steel, Taiwan's largest steelmaker, lost 2.2 percent while Taiwan Semiconductor Manufacturing rose 2 percent and United Microelectronics rose 0.5 percent.

Elsewhere around the Pacific region, prices ended lower on the Australian Stock Exchange in moderate trading, pressured by weakness in the financial sector. The blue-chip All Ordinaries Index, which lost 15.90 points during the previous session, slipped another 10.20 points, or 0.4 percent, to 2,860.00.

Analysts said the market came under pressure from weakness in the financial sector.

In trading, Commonwealth Bank fell 1.4 percent ahead of its first-half results due on Wednesday. Westpac Bank slipped 0.4 percent while fund manager and life insurer AMP dropped 2.3 percent.

Industrial Wesfarmers sank 13.4 percent after it posted a 24.7 percent rise in its first half results but warned it would probably miss its full-year profit target.

News Corp., which is expected to report second-quarter earnings on Thursday, rose 1 percent. Retail property fund Westfield America Trust fell 3.3 percent, brewer and wine maker Foster's fell 0.7 percent, and property developer Lend Lease fell 2.4 percent.

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