"Information and high-technology issues dropped, reflecting sharp falls in New York shares, especially by the Nasdaq index," Nikko Securities market analyst Kazue Mayuzumi said. On Monday share prices in the United States took a hit, with the Dow Jones Industrial Average shedding 2.16 per cent and the tech-heavy Nasdaq composite down 3.29 per cent.

"Buying on dips emerged midday on the belief that the planned setting up of investment trust funds may shore up the market later," Mayuzumi added. The Nikkei index recovered to 19,131.19 from the low of 18,815.37 by late in the morning. But share prices "failed to recover losses fully with renewed fears that the New York market could tumble again" Tuesday, Mayuzumi said. "Amid a lack of fresh domestic trading leads at present, it is inevitable to see trading driven by the overnight US share price movement," a dealer at a mid-sized Japanese securities house said.

ong Kong: Hong Kong share prices fell 0.4 per cent on a weaker US market but buoyed by merger talks between Cable and Wireless HKT and Singapore Telecommunications, dealers said. Ricky Tam, analyst at Delta Asia Securities, said "the market could have fallen further if not for the announcement of the possible merger" of Cable and Wireless HKT and SingTel. He said the market continued to be weakened by worries over US interest rate hikes. The key Hang Seng index lost 64.51 points to close at 15,103.04.Arlene Ngai, an analyst from Oriental Patron, said the market saw strong support at 15,000 points.

She said the overnight decline on Wall Street was a dampener for investment sentiment but the impact was limited as Hong Kong shares have gradually factored in a potential US interest rate hike early next month.

SINGAPORE: Singapore share prices closed 1.1 per cent lower following overnight falls on Wall Street amid worries over US interest rate hikes, dealers said. The benchmark Straits Times Index of the Singapore Exchange fell 25.81 points to finish at 2,238.83, while the broader All-Singapore Equities Index rose 1.86 points to 617.81. Dealers said the main focus was Singapore Telecommunications Ltd. (SingTel), the biggest company on the Singapore Exchange, amid talks that it was discussing a merger deal with Hong Kong's Cable and Wireless HKT Ltd. to create a 60-billion-dollar pan Asia-Pacific company.

Dealers said it could not be concluded that a deal will be struck between the two telecom giants. "There are still a lot of question marks as to where it goes from here," said one head trader. In general, confidence in the market is improving and certain blue-chips were seeing good buying from institutional investors in late trade, dealers said. "The technical picture is looking more and more positive," said the head trader.

KUALA LUMPUR: Malaysian shares closed 0.3 per cent lower on profit-taking, but bargain hunting in selected stocks lifted the market off its lows, dealrs said. The Kuala Lumpur Stock Exchange composite index fell 2.44 points to finish at 952.06, but off the day's low of 934.66 points. A Chief dealer at a local brokerage said investors took Wall Street's weak performance overnight as an excuse to take profits after recent sharp gains, with retail sellers predominating.

"But bargain-hunting on select stocks emerged." The sodomy trial of jailed ex-deputy premier Anwar Ibrahim resumed Tuesday after a two month hiatus but dealers said it had little impact on the market despite a small demonstration by his supporters.

SEOUL: South Korean share prices plunged 3.8 per cent on concern over a possible rush in Daewoo bond redemptions, with sentiment also weakened by a fall on Wall Street, dealers said. Analysts said the market gave way to heavy selling prompted by uncertainties over the cash settlement of Daewoo bonds from February 8. "After the index slid to 900 points in the morning, there was some bargain-hunting, but in the absense of market-moving shares (news) the falls spread to almost all sectors," KFB Securities Lee Sang-Joon said. The composite index closed down 35.55 points at 891.22, the lowest level since November 24 last year.

Shinheung Securities' Jeong Byung-Sun said the market may see a further correction. "There are growing concerns that some Financial institutions may find themselves in big trouble despite the government's aid and this fear seems to be driving the market downward along with a lack of leading stocks."Additionally, the market is likely to see a lack of demand over the next few days as companies and banks hold back funds to meet settlements, he said. "The determining factor is how the Daewoo-related bond redemption is resolved on February 8 ... until then, volatile trading mirroring U.S. Market movements is highly likely," Jeong added.