The markets were still focused on the developments in Indonesia, one day after the resignation of Suharto triggered jubilation among investors and sent regional indices soaring.

New president Bacharuddin Jusuf Habibie announced his cabinet, excluding Suharto's golfing buddy Mohamad 'Bob' Hasan, the former trade minister, and his eldest daughter Siti 'Tutut' Hardiyanti Rukmana who held the social affairs portfolio. Regional markets took the new cabinet in stride, and doubts persisted over Habibie's ability to lead the nation out of its worst economic crisis in 30 years.

Japanese share prices closed 0.3 per cent lower Friday on profit taking as investors took to the sidelines, brokers said.

``The downside was well supported by buying from public funds acting through foreign securities companies,'' one broker said.``Follow-through buying emerged, but not actively, because of investor concerns that bad news may emerge at the weekend in Indonesia,'' he added.

``It is difficult to say if the Nikkei 225 index will continue to rise and top the 16,000 point level, as this will depend on prospects for the yen and the dollar,'' the broker said. ``But it is clear that the downside should remain firm.''

The Nikkei Stock Average of 225 selected issues on the Tokyo Stock Exchange fell 43.60 points to close at 15,801.65. Hong Kong share prices dropped 1.2 per cent as investors locked in profits following three consecutive sessions of gains, dealers said. The key Hang Seng index lost 114.47 points to close at 9,555.98, after gaining 1.3 per cent in the previous day's trade.

Dealers said the market sentiment was also affected by uncertainty in the political situation in Indonesia despite the appointment of Bacharuddin Jusuf Habibie as President.

Australian share prices slipped 0.3 per cent, with trading interest drasticallysubdued by regional instability. ``It's like watching paint dry ... nobody is prepared to move their funds,'' said Macquarie Bank broker Lucinda Chan.

``People in the speculative stocks can't get out because they are too weak, people in consumer products are happy with their stock and the banks are too expensive,'' he added. The Australian Stock Exchange's main indicator, the All Ordinaries index, fell 7.6 points to 2,725.9. Singapore stock prices ended 0.5 per cent lower amid choppy trading as the market stayed glued to developments in neighbouring Indonesia, dealers said.

The benchmark Straits Times Industrials index of the Stock Exchange of Singaporefell 5.98 points to end at 1,313.67 while the All-Singapore index rose 1.43 points to 353.80. ``Prices were quite mixed in fairly chopping trading with bouts of profit-taking but at the same time there was underlying strength in quality stocks,'' said a dealer.

Malaysia's key stock index fell 2.8 per cent as investors locked in profits following sharpgains over the past two days, dealers said.

The Kuala Lumpur Stock Exchange's 100-share weighted composite index closed at 577.23 points, down 16.39 points from Thursday's close. The lesser second board index fell 9.1 per cent, or 11.65 points, to 116.16.

One institutional dealer at a local brokerage said investors were quick to take profits after the sharp gains as the domestic and regional economic outlook remained uncertain.

Another dealer said it was inevitable that investors were taking profits so soon as previous gains were too sharp anyway. It was a shortlived jubilation for the (regional) markets yesterday. Indonesian share prices closed 5.0 per cent higher after the resignation of longtime ruler Suharto despite a selldown of stocks of companies owned by his family and cronies.

The composite index closed up 21.137 points at 445.143 points on a low turnover of 201.7 million shares. There was strong selling pressure on shares linked to the Suharto family.

Share prices closed 2.4 per cent loweron the Korea Stock Exchange as foreigners dumped shares of blue chips amid concerns over threatened general strikes next week.

Banking shares came under heavy selling pressure on concerns over a shake-out of the banking sector under the ongoing government-led reform programme. Individual investors were net buyers of second liners but active profit-taking by foreigners offset the gains, LG Securities dealer Yoon Sam-wi said.