As traders fretted over a recount in Florida to decide whether Democrat Vice President Al Gore or Republican Bush would take the White House and the reins of the world's biggest economy, the volatile technology sector, as on Wall Street, was particularly hard hit. Given their first chance to react to the political limbo engulfing the world's top superpower, traders in Japan took their lead from their unsettled American counterparts.

The Tokyo Stock Exchange's Nikkei-225 average lost 2.2 per cent to close down 339.59 points at 15,060.05, as tech issues followed the nervy US Nasdaq index's 5.4 per cent overnight plunge.

"The Tokyo market is merely tracing the New York market. There are no clear incentives in the market right now," said Masakazu Kimura, head of equities at Tsubasa Securities Co. Nikko Securities products group director Hiroichi Nishi agreed.

"Japanese investors sat on the sidelines to see how the US market will react to the election result," he said. In Hong Kong, traders built on losses posted Wednesday over fears of deteriorating US-China ties should Bush beat Gore. After plummeting 1.6 per cent in a furious last 40 minutes of trading when Bush was prematurely reported to have won Wednesday, the market fell almost one percent again Thursday, losing 149.33 points to close at 15,504.80 off a low of 15,404.58.

However, some dealers cautioned expectations that a Bush administration would prove to be more "anti-China" than a Democrat White House were overplayed. Eric Yuen, research manager with Dao Heng Securities, said: "Fears that George W. Bush would win the election began to emerge from yesterday afternoon.

"I think the market has overreacted. I do not see any great impact on Sino-US ties even if George W. Bush, who has taken a harder stance towards China, gets elected." Alex Tang, research director of Core Pacific Yaimaichi, also dismissed investor claims that "once Bush wins, the market will collapse," although he conceded Bush may adopt a tougher stance with China.

The Republican party and Bush have been critical of President Bill Clinton's engagement of China, finding his administration's relations with Beijing's communist leadership and its lip-service to Chinese claims of sovereignty over Taiwan difficult to swallow. Elsewhere in Asia, the confusion in the United States also unnerved traders.

Singapore share prices closed lower, the Straits Times Index falling 12.73 points to 2,003.79. "The uncertainty over the US election will likely keep the market directionless for the rest of the week," an analyst at a local research house said.

Volume was also expected to decline, he added. A dealer with a Japanese brokerage said: "Everybody is just waiting for the results of the US election and for something to happen. "The volume is very thin today as investors stay sidelined. It is very difficult to see where this market is going."

AFP