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Asian markets outlook:

directionless tone seen

HONG KONG: Asian stock markets are likely to be mostly directionless in the coming week, although the return of fund managers from vacation should increase trading volumes on some bourses, brokers said on Friday.

Tokyo shares are likely to resume strengthening after a pause for breath in the past week, brokers said. Hong Kong investors will be looking for pointers from Wall Street, where the possibility of an interest rate cut is again being talked about, they said.

Other markets are likely to be flat or mixed, with Singapore shares seen losing ground after the past week's gains and the Sydney bourse continuing to rise, they said.

Following are the market highlights:

TOKYO: The Nikkei Average lost 261.81 points, or 1.45 percent, to close at 17,770.68 in the past week after soaring 1,240.15 points, or 7.39 percent the previous week. However, brokers were not depressed much by the drop.

"Sentiment is not bad because selective buying of various shares continued. Moreover, dealers will be able to take new positions next week as trade for September delivery starts," said Shunji Suesada, general manager at Yamaichi Securities.

Brokers said they would keep watching activity by foreign investors, whose purchases were not so active as in the previous week.

HONG KONG: Stocks are expected to head lower in the coming week amid a lack of fresh supporting factors, with U.S. stocks and bonds seen likely to provide some clues to the direction of trade, players said.

"We view the market's latest rebound as over and expect a drop to below the 9,000 level next week." said Samuel Lau, research director at China Everbright Securities. But a broker at a major local house argued that the market could strenthen after selling linked to next Wednesday's index futures expiry is done. The blue-chip Hang Seng Index jumped 184.57 points on the week to close Friday at 9,080.39.

BANGKOK: The Stock Exchange of Thailand index is expected to continue to languish in the coming week, brokers said.

"There might be an upturn but volume is still likely to be slim," a Dhana Siam broker said. "People are not confident. They're still waiting for some good news."

Investors are particularly concered about inflation and the new government's ability to handle it, brokers said.

The market finished 3.59 points higher at 1,349.33 on Friday. Last Friday it finished 19.61 points down at 1,320.91.

BOMBAY: Indian blue chips are expected to open stronger in the coming week in a technical correction after the past week's fall, traders said.

"The trend should reverse and prices are bound to bounce back on Monday on a technical correction," a trader at a leading local broking firm said.

BSE's 30-share index has fallen from 3,446.18 a week ago to a provisional close of 3,378.23 on Friday. The composite National index has dropped from 1,578.78 points to 1,552.18 during the same period.

The BSE will be closed on Tuesday for a Hindu festival.

COLOMBO: Sri Lanka stocks are expected to open to directionless trading in the coming week after ending a week of virtual inactivity, brokers said.

"We need something to snap the market out of its current groove and push it either up or down," said Deva Ellepola of HDF Securities. "Until such time, it will continue to remain thin and narrow."

The Colombo Stock Exchange barely budged this week, easing 3.47 points from 748.32 to 744.85. On Friday the index closed 1.54 points lower on turnover of 37.25 million rupees.

JAKARTA: Brokers said they expected the market to be more inspired in the coming week as more fund managers return from their summer holidays.

One foreign brokerage analyst said the market was expected to hover at 500 points while investors awaited more company results next week.

"Earnings growth is expected to remain strong in the cigarette and cement sectors. But the consumer sector will remain the focus because it is poised to post the highest growth due to the current robust economy growth," he said.

The Jakarta stock index ended on Friday at 500.60 against 500.65 the previous Friday.

KUALA LUMPUR: Malaysian shares should continue to track a tight trading range in the coming week with concern about rising domestic interest rates and lack of fresh incentives keeping investors on the sidelines, brokers said.

"I don't think there's much to look forward to next week," said a bank-based brokerage dealer. "It should continue to drift within narrow ranges."

Brokers said there were worries that Bank Negara might push up rates further due to inflationary pressures.

The Kuala Lumpur Stock Exchange's Composite Index ended on Friday at 1,028.76, against 1,028.33 the previous week.

MANILA: Philippine share prices are seen trudging lower in the coming week as general bearish sentiment is likely to dampen the market, brokers said.

The release of the first half gross national product (GNP) figure by late next week is seen as the sole factor that will influence the market.

Market traders are expecting the GNP to rise by around 5.0 percent in the first half of the year. However, a senior government official has said it might be lower due to weak agricultural production.

The composite index slipped 63.19 points, or 2.22 percent, week-on-week to close at 2,777.22 points on Friday.

SEOUL: Financial shares are expected to be sluggish in the coming week, as cash demands before the Korean Thanksgiving holidays from September 8-10 distract investors, brokers said.

"The correction will continue early in the week and it wil be hard to make a profit in the market," said a Daewoo Securities broker. "But investors will be bargain-hunting, especially in small and mid-cap stocks and semi-conductors."

Financial stocks are expected to see more profit-taking, but will regain some momentum towards the end of the week.

The composite index ended 921.10, up 14.2 points from last Friday's 906.80.

SINGAPORE: The Singapore stock market is likely to move back lower again after its recent recovery, dealers said.

On Friday the 30-share Straits Times Industrials Index closed at 2,125.08 points, up 38.20 on the day and 20.70 above its position at 2,104.38 points a week earlier.

But technical and fundamental pressures may force it lower. Chartists argue the index needs to test near-term support at 2,080 and could spin into a downtrend if it breaches that level.

Economists say a recent slowdown in the Singapore economy is curbing investors' interest in local blue chips.

"They are looking elsewhere for growth," said one dealer.

SYDNEY: The Australian share market's positive trend of recent days is expected to continue as the local profit season gets into full swing.

The All Ordinaries index closed at 2,117.3 points, up 15.3 points over the week.

Brokers said the stronger finish to the week was due improved buying interest from both domestic and offshore investors. "There has been good buying interest in the last couple of days and we see the market's positive trend as continuing," said Scott Dolling of Day Cutten.

TAIPEI: Taiwan share prices are expected to consolidate in the coming week amid uncertainties caused by the upcoming presidential elections in March, 1996, and China's attitute toward Taiwan, brokers said.

After President Lee Teng-hui announced this week that he would run in the presidential elections, investors were worried over a possible split in the ruling party and more China threats, brokers said.

"But if China does not take further unfriendly moves against Taiwan in coming days, the index may enjoy a larger rebound," Tank Hung of Yuan Ta Securities said.

On Friday, the index ended at 4,670.21 points, compared with 4,830.34 a week ago. A 4,585-4,830 range was seen for the coming week.

WELLINGTON: New Zealand share prices ended the week barely changed and face mixed prospects in the coming week with the latest tightening of conditions by the Reserve Bank likely to contain any rally, brokers said.

Working against that bearish outlook will be a raft of results from major companies, the most important being Fletcher Challenge's end-of-year result on Wednesday, which are widely expected to come in strongly, they said.

But any gains will be hard fought, with short-term wholesale rates of over nine percent likely to prove a big temptation for cashed-up investors. The NZSE-40 Capital Index ended at 2,097.46, just over one point down from last Friday's 2,098.71 close.-Reuter