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Systems Glitch, Poor Data Sink Japanese Shares

Reuters
Friday, 8 Feb 2008 | 5:17 AM ET

The Japanese market fell 1.4 percent in a quiet Friday session. But Australia finished 1.1 percent higher. Volumes were thin with many investors away for the lunar new year.

Most Asian markets are closed for the Lunar New Year holiday Friday. Markets in Hong Kong, Indonesia, Malaysia, Singapore, South Korea and Taiwan will all reopen Monday. The Chinese market will reopen Wednesday.

Japan's benchmark Nikkei 225 Average extended losses to close 1.4 percent lower as investors sold machinery stocks such as Fanuc on weak industry data and a halt in TOPIX futures trade limited the ability to hedge. Disappointing earnings results by Toray Industries and the system glitch sparked further selling in the market's afternoon session.

The system glitch resulted in the Tokyo Stock Exchange halting trade in March 2008 TOPIX futures. The bourse said the problem occurred in its newly installed derivatives system, which started operation on Jan. 15.

Australian shares closed 1.1 percent higher, as investors picked up bargains in the banking sector which had been pummeled earlier in the week on concerns about the U.S. and global economic outlook.

The four biggest banks were among the top six gainers in the index, led by Commonwealth Bank of Australia, which rose 2.7 percent. Dealers said the banks were looking cheap after sharp falls earlier in the week when credit worries in the United States hit the financial sector. The two biggest drags on the index were the top two miners, BHP Billiton and its takeover target, Rio Tinto.