Global Worries Pressure Asian Stock Markets

TOKYO â€”  Asian stock markets opened lower Monday as Russian President Boris N. Yeltsin’s decision to dismiss his 4-month-old Cabinet coupled with last week’s market declines in the U.S. and elsewhere rippled through the global financial community.

In Tokyo, the benchmark Nikkei-225 stock index plunged 308.14 points, or 2.%, to 14992.76 after the opening bell. The broader Topix index of all companies listed on the first section of the Tokyo Stock Exchange dropped 15.23 points, or 1.29%, to 1161.28.

“Russian instability and U.S. market volatility� are pressuring the market, said Dhia Amir, senior equity sales trader at Nomura Securities Co. in Tokyo. That’s leading “to continuous selling of Japanese blue chips.�

Stocks in Taiwan and Malaysia opened lower as well.

In Taipei, Taiwan stocks fell for a third day--to their lowest point so far this year--as declines in U.S. shares and major markets fuel concern that profits at Taiwanese technology companies may be squeezed further.

Taiwan Semiconductor Manufacturing Co. and other computer-related companies led the declines. Investors were worried some of these companies will report worse-than-expected earnings for the first half. A 1.9% drop Friday in the Nasdaq composite index added to that concern because Taiwanese makers rely on the U.S. market for earnings.

“Instability in international markets suggests economic problems are expanding worldwide,� said Kevin Lin, manager of $144 million for Entrust Investment Trust Corp. Falling economies in Russia and Latin America are seen weakening investors confidence in world equities, he said.

Taipei’s TWSE index lost 152.69, or 2.11%, to 7,060.68. The Taiwan dollar fell to as low as 34.815 to the U.S. dollar, its weakest since June 22.

Investors trading in Kuala Lumpur are worried about the hit on company earnings as Malaysia slides into its first recession in 13 years. The benchmark Composite Index fell 2.14 points, or 0.66%, to 321.92.

Meanwhile, the dollar was little changed against the Japanese yen, after rising Friday, as skepticism that Japan will do what’s needed to restore stability to its banking system offset speculation the government may act to stem the yen’s decline.

Haruhiko Kuroda, director general of the Finance Ministry’s international bureau, said Japan is ready to support the yen if necessary because an excessively weak yen is bad for Japan, Asia and the rest of the world.

“The dollar’s climb was limited as traders were concerned about possible intervention,� said Hiroshi Sakuma, a foreign exchange manager at Barclays Bank. “Even foreign investors will dump the yen because Japan’s action to bail out troubled banks doesn’t seem bold enough.�

The dollar, which early Monday rose as high as 145.23 yen, was recently quoted at 145.68 yen, little changed from 144.91 yen in late New York trading Friday.

But the dollar rose against the German deutsche mark after the Russian president sacked his Cabinet, which last week surrendered its fight to stabilize the ruble and announced a mandatory conversion of government debt that frightened foreign investors.

On the Nikkei, Japanese bank stocks fell on disappointment with the government’s policy on supporting weak banks. The government will provide more than 500 billion yen in capital to the troubled Long-Term Credit Bank of Japan to make it an acceptable merger partner for Sumitomo Trust & Banking Co.

Okiharu Yasuoka of the Liberal Democratic Party said the government’s plan to use public funds to help banks is aimed at avoiding panic that would ensue from a major bankruptcy.