NEWS: Nikkei Plummets 3 Pct, Back Below 10,000
Sunday November 16, 10:28 pm ET
By Daniel Hauck
biz.yahoo.com
TOKYO (Reuters) - Japan's Nikkei average fell three percent on Monday morning and was below 10,000 for the first time since August, as small investors dumped shares that had helped power its rally such as Softbank Corp. and banks.
Fears about the naming of Japan as a possible target in an al Qaeda statement were also weighing on the market, while Tokyo Electron and other exporters dropped after disappointing corporate results helped dent U.S. stocks on Friday.
"Everyone wants something extra special, but right now there really aren't any incentives to buy," said Akio Yoshino, general manager at SG Yamaichi Asset Management.
"Institutional investors are deciding that the best place to be is on the sidelines... while Internet traders are taking profits and individual investors are being hit by margin calls."
The Nikkei ended the morning session down 3.64 percent at 9,796.80, breaking below 10,000 for the first time since August 18. The index had fallen 1.65 percent on Friday. The broader TOPIX index was down 3.34 percent at 973.19.
"Beyond the effects of the fall in U.S. stocks, bank shares are getting hit following the results of the FSA (Financial Services Agency) inspections on Friday," said Hiroaki Kuramochi, head of global equities at Credit Lyonnais.
"And fears about the specific naming of Japan in the latest al Qaeda statement are also weighing on the market."
London-based Arab-language newspaper al-Quds al-Arabi said that Osama bin Laden's al Qaeda network was planning car bombings against the United States and its allies, including Japan.
Mizuho Financial Group Inc and other bank shares took a hit after the FSA said it had identified a need for 900 billion yen ($8.3 billion) in loan-loss charges at top banks after inspections of their big borrowers. The FSA said checks into 161 firms whose borrowings totaled 13.1 trillion yen had resulted in a downgrade of 24 borrowers to riskier classifications in terms of their financial health.
Mizuho, the world's largest bank by assets, slumped 7.92 percent to 221,000 yen.
"It's kind of disappointing to find that banks are still lax in assessment of borrowers," said Kazuyuki Naito, general manager of equities sales and trading at UFJ Tsubasa Securities.
SOFTBANK, TROUBLED BUILDERS DIVE
A continued move by foreign funds to lock in profits ahead of November book-closings also hurt banks, as did selling by small investors, who played a key role in the market's rally from 20-year lows set in April.
Another stock hit by selling by individuals was Internet services firm Softbank, which plunged 12.25 percent to 3,510 yen.
Traders said Softbank was hurt by disappointment that Yahoo Japan Corp, the crown jewel in its investment portfolio, was not included in Morgan Stanley Capital International's rejig of its Japan Index last week.
Financially weak firms, especially in the construction and real estate sectors, were also hurt after the FSA results on concern that they could face further difficulty in raising funds.
"These stocks as well as bank shares had been bought on optimism in the past few months as we saw a great future in them," said UFJ Tsubasa's Naito. "That was apparently overdone."
Ailing builder Tobishima Corp fell 16.67 percent to 90 yen, while fellow builder Haseko Corp plunged 16.76 percent to 149 yen.
Exporters were also sluggish after a fall on Wall Street on Friday, with chip-related firms particularly weak after investors locked in profits on their U.S. peers.
Japan's largest producer of chip-making equipment, Tokyo Electron Ltd., was down 6.69 percent at 7,250 yen.
But overall selling was broad-based, with 1,423 decliners and only 65 gainers on the first section. Trading volume edged down, with 542.29 million shares changing hands, compared with 599.5 million on Friday morning.
Also weighing on overall sentiment was a suspension of trading on the Jasdaq over-the-counter market for start-ups during the early morning due to a system failure. Earnings will be in focus later on Monday, with Japan's top advertising agency Dentsu Inc and Fuji Heavy Industries Ltd., the maker of Subaru cars, set to report. |
