The Nikkei ended under 12,000 for the first time since March 14, on chip losses

By staff and wire reports

HONG KONG, China -- Asian stocks closed lower Wednesday, as Japan's Nikkei index sank below 12,000 for the first time since March.

Australia and Hong Kong also lost ground. Taiwan crashed 3.5 percent to a fresh seven-year low.

South Korean stocks settled to a three-month slump.

In Tokyo, the benchmark Nikkei shed 1.95 percent to finish at 11,892.58, its worst close since March 14.

Despite U.S. overnight gains, the drop was across the board with Japan's broader Topix down 1.98 percent at 1,199.67.

Techs and telecom down on Intel

Techs and telecoms led the losses, after a steep after-hours drop in U.S. chip giant Intel Corp.

Intel announced earnings after the U.S. close Tuesday that beat already lowered expectations but disappointed investors.

Japan's biggest stock, and its dominant mobile-phone company, NTT DoCoMo Inc., fell again.

It lost 5.6 percent to 1.84 million yen on jitters over profits. There was also more spillover from Tuesday's report it will delay Internet-phone rollout in Europe because clients are having trouble using the software.

Investors are also disappointed with reform progress from Prime Minister Junichiro Koizumi. Those reforms will be a push at this weekend's G8 talks in Genoa, Italy.

"We had once thought Mr. Koizumi's government could meet our expectations, but it now seems we may have overestimated their ability," said Hiroaki Muto, general manager at Nissay Asset Management.

Major chip stocks fell. Fujitsu Ltd. dropped 4.1 percent to 1,169 yen and NEC Corp. lost 2.6 percent to 1,556 yen.

Other major high-tech stocks followed suit, with electronics bellwether Sony Corp. down 3.7 percent to 7,000 yen, its lowest closing since August 1999.

Mizuho Holdings Inc., the world's largest bank by assets, led a tumble in banks, falling 4.3 percent to 485,000 yen.

Japan's banks have vast stock holdings, and slumping markets hinder their chances to write off bad loans.

Australia lower on News decline

In Australia, the benchmark S&P/ASX index finished down 0.6 percent at 3,393.9, wiping out a morning rally.

Shares edged lower as News Corp., Australia's biggest stock and 12 percent of the index, fell 1.1 percent to A$18.10.

Drawn-out negotiations to buy U.S. satellite company DirecTV have kept News in a tight range, though EchoStar Communications dropped its bid this week. Electronics retailer Harvey Norman fell another six cents to A$4.10 after warning Tuesday that sales remained soft.

Supermarket supremo Woolworths, a popular defensive play, rallied 26 cents to A$11.00. Investors figure people need food, even in bad economic times.

Australia's second-largest stock, telecom giant Telstra, finished nine cents lower at A$5.03.

New Zealand's benchmark NZSE-40 Capital index was the only Asia-Pacific market to post a gain. It rose 1.5 percent to 2,036.

Taiwan tanks again

In Taiwan, the benchmark Taiex was sharply down, dropping 3.5 percent to 4,219.89.

Taipei's chip-heavy market is now at its lowest close since November 1993. It has plunged 32 percent since February, as Taiwan's economy slumps.

World microchip-foundry leader, Taiwan Semiconductor Manufacturing Co., fell 0.8 percent to T$62. It is Taiwan's biggest stock.

No. 2 chip foundry and No. 2 stock United Microelectronics Corp. slipped 2.4 percent to T$36.40.

In Hong Kong, the benchmark Hang Seng Index ended down 0.5 percent at 12,427.19. But volume was very low.

Legend Holdings, China's biggest computer maker, closed at its lowest since January 2000. Intel's drop sent it down 3 percent to HK$4.00.

All techs were weak, including China's top two cell-phone companies. China Mobile fell 2.1 percent to HK$36.70. China Unicom dropped 2.6 percent to HK$12.95.

China plays sold off again on fears the Chinese government is cracking down on "hot money" making its way from the mainland to play Hong Kong stocks.

South Korea's markets, closed for the Constitutional Day holiday yesterday, reopened only to drop 1.5 percent. The benchmark Kospi closed at 540.53.

Steel maker Pohang Iron and Steel Co., or POSCO, led the market lower with a 4.0 percent drop to 95,500 won.

Hynix Semiconductor gained 0.3 percent to 1,690 won, despite warning on earnings and saying it would shut U.S. production for six months.

Chip maker Samsung Electronics, Korea's largest stock, rose 0.3 percent to 167,500 won despite other chip losses.

In Singapore, the benchmark Straits Times index was down 0.7 percent at 1,627.44 in afternoon trade, on thin volume and chip losses.

Reuters contributed to this report.