Expectation of Longer War Lowers Asian Stock Markets

Asian stock markets sobered up today after the binge that followed the early successes of U.S.-led forces against Iraq as the realization dawned that the world was in for a war of at least weeks, not days.

Led by Tokyo, most Asian stock markets lost ground as the perception grew that the Persian Gulf war would last longer than first expected. Even where there were gains, investors were apprehensive.

Tokyo’s benchmark Nikkei index lost nearly 2% in the lightest trading since the conflict began last Thursday.

It closed down 456.11 points or 1.92% at 23,352.19, with only 230 million shares traded, only about one-third of Friday’s frenetic activity.

“Rather than selling today, the declines stem from a lack of buying,” said market analyst Takahide Furuhashi of DB Capital Markets (Asia). “After the initial expectations for a short war, people are viewing the market more cautiously today.”

Iraq’s weekend missile attacks on Israel and Saudi Arabia strengthened the belief that it may take some time for Iraq to be forced out of Kuwait.

Shares were weaker in Hong Kong, but there were gains in Sydney, Australia, and especially in Taipei, Taiwan, where prices were up for the fourth successive day on late buying by investors encouraged by the war’s course.