Asian stock markets headed indifferent directions on Friday, with Hong Kong and Sydney drawing strength from Wall Street and hitting record highs while Tokyo dropped on the dollar's fall.

Taipei and Bangkok, meanwhile, fell on local political and financial concerns.

The dollar slid to below 123 yen in Asian morning trade, its lowest level in more than a month. The decline was ignited by widespread concern that central banks would sell the dollar to halt its two-year rally.

In Tokyo, the dollar's fall prompted traders to take quick profits in export-oriented shares ahead of the weekend.

The benchmark Nikkei index of 225 leading shares fell 259.03 points or 1.29 percent to close at 19,802.78.

"Currencies provided a cue for investors who had been buying blue chips lately to start correcting," said Noboru Yorita, general manager at Tachibana Securities in Tokyo. "How fast buying resumes, or when it does, will depend on the yen."

On Thursday, the Dow Jones industrial average rose 50.97 points to 7,136.62, lifted after a drop in long-term interest rates that helped investors put a positive spin on the impact of a proposed capital gains tax cut.

The Dow's recovery boosted sentiment in Hong Kong and Australia, where the stock markets rose to record high levels.

Hong Kong stocks thundered to a record close, with the turnover swelling to the heaviest in the exchange's history.

The index gained 190.5 points or 1.39 per cent to end at a record closing high of 13,930.80, surpassing the previous record of 13,868.24 set on January 20.

"The record highs on Wall Street have given us the room to move ahead today," said Francis Wong, executive director at DBS Securities in Hong Kong. "But the bulk of the short-term movement is due to derivative and hedge fund players."

Active buying in HSBC Holdings and Hong Kong Telecommunications were behind the index's earlier leap to an all-time high of 14,047.20.

But it later retreated after CITIC Pacific announced that it had agreed to sell its stake in Hongkong Telecom to China Everbright Holdings Co Ltd, one of the largest conglomerates in China.

CITIC Pacific and Hongkong Telecom, both of which were suspended in the morning, resumed trading in the afternoon and were partly responsible for the index's record leap.

In Australia, the key All Ordinaries index rose to a new record close of of 2,526.0, up 21.3 points from Thursday, surpassing a previous record close of 2,517.6 set on Wednesday. But it was off the intraday record high of 2,528.1.

In Taipei, shares slumped on jitters over political instability after the resignations of three cabinet members ahead of a planned cabinet reshuffle. The weighted index ended down 116.48 points or 1.39 percent at 8,233.37.Minister without portfolio Ma Ying-jeou, Interior Minister Lin Feng-cheng and Council of Agriculture chairman Tjiu Mau-ying tendered their resignations on Thursday .

amid a public outcry over the government's failure to maintain social order.Ben Lee, head of research at Nomura Securities in Taipei, said instability would continue until the completion of the planned reshuffle. But he saw no sharp falls ahead.

"Many expect the government to likely issue certain bullish news to help support the market, so a consolidation is more likely before the political uncertainty is over," Lee said.

In Thailand, stocks took a further drubbing in the morning, as concerns over the currency and economy prompted foreign investors to unwind positions in bank and finance stocks.

The benchmark SET index had fallen 12.57 points, or 2.05 per cent, to 601.49 by the break after briefly falling below the 600-point level.

The Singapore market had firmed by lunchtime, with the Straits Times Industrials Index rising 5.22 to 2,064.60.

Jakarta was higher at midday, aided by foreign buying. The key composite index was up 5.78 points or 0.87 percent at 672.63 points by the lunch break.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.