Asian stocks mixed as caution reigns over US rates
Hong Kong: Asian stocks were mixed Thursday with sentiment remaining cautious as investors await further signals of the likely direction of US interest rates. While US rates will have little direct effect on most Asian economies, any resulting turmoil in US markets would flow on to Asian markets, which have been tracking Wall Street in recent months.The volatile Bombay market bucked the cautious trend rising 5 per cent after the government announced new tax breaks Wednesday. A depressing new millennium for the Philippines market took another turn for the worse, sinking 2.5 percent after violence in Mindanao worsened on Wednesday. Hong Kong share prices dropped 1.7 per cent as funds dried up following overnight losses on Wall Street.
"As expected, the market is weak due to a weak performance on Wall Street and a lack of an inflow of funds," said Alex Tang, research director at Core Pacific-Yamaichi. Hang Seng index lost 263.40 points to close at 15,314.07. Dealers said the market was dominated by traders while retailers and institutional investors were mostly sidelined due to the negative outlook for the US market. Many retail investors are also reluctant to sell their shares at a loss.
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