Nikkei ends at 16-year low,bank slide darkens mood
Reuters, 07/23/2001 02:13
(Updates to close)
TOKYO, July 23 (Reuters) - Tokyo's Nikkei average slid to a 16-year closing low on Monday, undercut by falls in Japan's major banks amid renewed fears a worsening economy and policy stagnation spell trouble for their bottom lines.
"Investors can feel the market slipping right through their fingers. When that happens, they dump the large caps, and banks are the prime target," said Takahashi Yamazaki, chief investment officer at Tokio Marine Asset Management.
The Nikkei <.N225> lopped off 2.51 percent or 298.76 points to 11,609.63, its lowest close since January 7, 1985, when it closed at 11,575.52.
The tech-sensitive Nikkei is now less than a third of its value at the peak of the asset-inflated bubble in late 1989.
Mizuho Holdings Inc (TOKYO:8305), the world's largest bank by assets, plunged 7.27 percent to 421,000 yen, with traders expressing disappointment at Japanese Prime Minister Junichiro Koizumi's failure to present concrete steps to clean up the banking sector's bad loans at a weekend summit of the Group of Eight (G8) nations.
Dragged down by several large-cap banking and telecoms stocks, the broader TOPIX index <.TOPX> shed 2.63 percent or 31.49 yen to 1,163.76, a hair's breadth above a year-to-date closing low of 1,161.97 marked on March 14.
UFJ Holdings (TOKYO:8307) dropped 7.85 percent to 528,000 yen, while fellow mega-bank Mitsubishi Financial Group (TOKYO:8306) plunged 8.07 percent to 889,000.
As part of Koizumi's reform plans, banks are set to scrub bad loans off their balance sheets in two to three years. Market participants want more details about how this will be achieved and are concerned that increased write-offs will spark a rash of bankruptcies, dent an economy already flirting with a recession, and hurt banks' lending business.
In the communications sector, Japan Telecom Co Ltd (TOKYO:9434) dived 9.54 percent to 512,000 yen after Nikko Salomon Smith Barney downgraded its investment rating on the nation's third-largest carrier.
Bridgestone Corp (TOKYO:5108) was hammered, losing 15.7 percent to 1,073, hit by news U.S. officials have moved toward forcing another recall of its U.S. unit's tyres.
Mirroring falls in major U.S. tech stocks after a slew of dismal corporate results and a bleak forecast from software giant Microsoft Corp (NASDAQ:MSFT), high-tech bellwether Sony Corp (TOKYO:6758) lost 1.96 percent to 7,020 yen, paring Friday's 2.29 percent rebound.
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Copyright 2001, Reuters News Service |
