Tokyo stocks dip into negative territory by close
By Keiko Takagi
TOKYO, Sept 16 (Reuters) - Tokyo stocks erased early gains to post a modest loss on Wednesday as traders awaited news as to whether Japan's opposition parties would accept a compromise on dealing with ailing Long-Term Credit Bank of Japan
A late wave of hedge selling in the December futures ahead of the September book-closing dragged the market lower just before the market close.
The benchmark Nikkei 225 average close down 29.67 points or 0.21 percent at 14,197.70. December futures were down 250 at 14,070.
Activity was subdued with a mere 385 million shares changing hands on the first section and 4.34 million on the second section.
Traders said the ruling Liberal Democratic Party's compromise proposal on LTCB, which reportedly involved a temporary nationalisation of the ailing lender, captured attention, but the outlook remained gloomy.
''Even if there is an agreement on LTCB soon, banking shares are likely to remain soft on the poor outlook for their earnings forecasts,'' said Masatoshi Kikuchi, a senior strategist at Daiwa Institute of Research.
Traders said other banks would likely come under pressure if selling in LTCB mounted.
''Some banks that have been rumoured to be in poor condition are likely to be targets of speculative selling,'' said Kazue Mayuzumi, head of equities at Nikko Securities.
''LTCB shares are likely to fall further if Japan's opposition parties accept the compromise,'' Mayuzumi said.
LTCB was off 13 at 25 by the close. The share fell to a record low of 19 on Monday.
The banking subindex was off 0.20 percent.
Traders were also reluctant to take positions ahead of U.S. Federal Reserve Chairman Alan Greenspan's Congressional testimony later on Wednesday.
''Downside risks have lessened amid hopes for a cut in U.S. interest rates,'' said a trader at a mid-sized broker.
Broader indexes were up. The TOPIX index of all first section shares was up 3.34 or 0.31 percent at 1,087.50. The capitalisation-weighted Nikkei 300 was up 0.78 points or 0.37 percent at 212.94.
The second section was up 4.00 points or 0.34 percent at 1,166.73.
Advancers edged decliners 578 to 535 with 162 issues unchanged.
Nidec Corp was up 1,330 at 11,790. The disk-drive motor maker made its debut on the first section of the Tokyo Stock Exchange on Wednesday.
Hitachi Cable Ltd was off 44 at 541 after it revised its 1998/99 group net forecast to 3.00 billion yen from 9.40 billion yen. |
